Farming News - Corn supported by expected cut in U.S. harvest estimate
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Corn supported by expected cut in U.S. harvest estimate
* U.S. corn yield set to be trimmed around 160 bu per acre
* U.S. harvest pressure caps soybean prices
U.S. corn, soybean and wheat futures posted modest gains on Thursday, supported by a weak dollar, although volumes were light ahead of a key U.S. supply/demand report due for release on Friday.
The dollar remained around a 10-month low against a basket of major currenciesMarkets are treading water ahead of the U.S. Department of Agriculture's (USDA) October world agricultural supply and demand estimates (WASDE) report due for release at 1230 GMT on Friday.
The USDA is expected to trim its forecast of 2010/11 U.S. corn production amid disappointing yields from the crop now being harvested.
"The market is anticipating a lower number and the yield situation is compounding that," said Brett Cooper, senior manager markets at FCStone Australia.
In its Sep. 10 supply/demand report, the USDA projected the U.S. corn crop at a record high of 13.160 billion bushels with a yield of 162.5 bushel per acre.
"The average trade guess is that the USDA will cut its corn yield to 160, but there are guys looking for a number well below that," said Cooper.
"Anything below 160 will be mildly (price) supportive," he added.
The government agency may also adjust its demand-side data to cushion a startlingly high corn stocks estimate as of Sept. 1, issued last week.
Chicago Board of Trade corn for December delivery rose 0.51 percent to $4.91 per bushel by 0347 GMT after easing slightly on Wednesday as soybeans and wheat futures lost ground.
Corn is slowly clawing back ground lost last week when the contract fell below $5.00 as speculators cut long positions after the USDA reported much-higher-than expected U.S. old crop corn stocks.
Analysts also expect the USDA to pare its soy production estimate to take account of a downward adjustment in
planted acreage in the United States even though farmers have been reaping blockbuster yields.
Soybeans for November delivery rose 0.40 percent to $10.66-¼ per bushel after easing 0.9 percent on Wednesday. The November contract hit a 13-month high last week of $11.44 but has since succumbed to pressure from the bumper U.S. harvest.
Still, brisk export demand from China and a lack of rain in Mato Grosso, Brazil's top soybean producing state, delaying new crop seedings, has put a floor under prices.
Wheat for December delivery gained 0.38 percent to $6.60-¾ per bushel, supported by a weak dollar and dry weather in the U.S. Midwest raising concerns about winter wheat plantings. Seeding in Oklahoma has already been delayed.
"The market is keeping an eye out for the next problem in wheat," said Cooper.