Corn Rises After USDA Reports Lower Yield -- Daily Grain Highlights
13 August 2022 - 7:09AM
Dow Jones News
By Kirk Maltais
--Corn for December delivery rose 2.3% to $6.42 1/4 a bushel on
the Chicago Board of Trade Friday, in reaction to the USDA cutting
its forecast for corn yields more than expected by analysts.
--Soybeans for November delivery rose 0.4% to $14.54 1/4 a
bushel.
--Wheat for September delivery fell 0.6% to $8.06 a bushel.
HIGHLIGHTS
Sliced Yields: In Friday's WASDE, the USDA forecast that the
U.S. corn crop will have a yield of 175.4 bushels per acre this
year. That is down from 177 bushels per acre previously forecast.
Analysts surveyed by The Wall Street Journal were expecting the
USDA to cut corn yields to 175.8 bushels per acre. The USDA said
corn yields are forecast as higher than a year ago in Illinois,
Minnesota and South Dakota. However, yields in Indiana, Missouri,
Nebraska and Ohio are forecast below last year. "The stage is set
for further corn yield reductions," said Brian Hoops of Midwest
Market Solutions. "Trade will be looking for smaller yields in
upcoming reports."
Pared Gains: The USDA's revision of 2022/23 soybean yields
higher than previously expected- at 51.9 bushels per acre-triggered
selling in soybeans following the WASDE release, with more possibly
to come. "The 'bull' [was] not 'fed' from a variety of figures,"
Mike Zuzolo of Global Commodity Analytics told the WSJ. "If rains
come next week, I'd expect a deeper pullback with long liquidation,
especially if the Brazilian Real continues to soften against the
greenback."
Currency Flex: Strength in the U.S. Dollar index weighed on CBOT
wheat futures throughout the trading session, according to Donna
Hughes of StoneX in a note. "This comes following prices hitting a
two-week high during yesterday's trading session," Hughes said. The
U.S. Dollar Index on the ICE rose 0.5% Friday after trading lower
for the previous four sessions. Weather conditions in the U.S. and
Europe also applied pressure to wheat.
INSIGHTS
Short-Lived Trend: Friday's WASDE report showed corn yields
dropping more than analysts expected, while soybean yields are seen
rising. However, the likelihood of these figures remaining accurate
through the next few months is being questioned by traders. "Lots
of room for U.S. corn and bean production to change as it is too
early to be overly confident in production estimates," said Doug
Bergman of RCM Alternatives in a note following the report's
release.
Expecting More: Russian and Ukrainian production and export
figures were adjusted slightly higher by the USDA in its WASDE
report--but some traders were expecting more dramatic changes to
the figures. "Interesting to see they did not increase the Ukraine
export estimate much," RIch Nelson of Allendale Inc. told the WSJ.
For wheat, Ukrainian exports were revised 1 million metric tons
higher to 11 million tons, while Russian exports were marked 2
million tons higher, amid a 6.5 million ton uptick in wheat
production in the country.
AHEAD:
--The USDA will release its weekly grains export inspections
report at 11 a.m. ET Monday.
--The USDA will release its weekly crop progress report at 4
p.m. ET Monday.
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Wednesday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
August 12, 2022 16:54 ET (20:54 GMT)
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