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Grains end mixed, await USDA data

11/08/2012 @ 3:53pm

U.S. grain and soy futures ended mixed in light trading Thursday, as traders positioned themselves for Friday's crop reports from federal forecasters.

Wheat futures posted the strongest finish, boosted by expectations that the U.S. Department of Agriculture will tighten its global supply forecasts for the grain.

December wheat futures ended up 8 1/2 cents, or 1%, to $9.02 1/2 a bushel at the Chicago Board of Trade. Kansas City Board of Trade December wheat climbed 5 1/2 cents, or 0.6%, to $9.37 a bushel. MGEX December wheat finished down 1 cent, or 0.1%, at $9.58 3/4 a bushel.

World wheat supplies are tightening up, amid production woes in the Southern Hemisphere, especially Australia and Argentina, said Bill Gary, president of agricultural-advisory firm Commodity Information Systems Inc. in Oklahoma City. "The USDA will cut world estimates significantly Friday," he said.

Wheat futures were also buoyed by the poor start to the growing season for the U.S. winter-wheat crop. The condition of the crop, which mostly has been planted and will be harvested next spring and early summer, is rated at the lowest level for this time of year since the USDA started releasing the data in 1986, USDA data show.

The crop is growing in extremely dry soil in states such as Kansas, after a severe drought this past summer wiped out ground moisture across the country's midsection.

The combination of tighter global supplies and uncertainty surrounding U.S. crops is raising hope for sluggish U.S. export demand for the grain.

Supplies from Europe's Black Sea region have dwindled due to droughts there, and crops in the Southern Hemisphere will be smaller than originally expected. All of these factors should force wheat importers to eventually turn to the U.S. for supplies, Mr. Gary said.

Wheat futures have struggled to break out of a three-month trading range, pressured by lackluster export demand, which stemmed from a jump in U.S. prices above those of foreign competitors.

Wheat joined corn and soybeans in trading lower early on Thursday. But wheat reversed course as the session went on. The early drop came from technical trading and risk aversion ahead of the USDA reports.

U.S. soybean futures declined, slipping to a three-week low. Traders anticipate federal forecasters Friday will raise yield and production estimates for this fall's soybean crop.

Soybean futures drew added pressure from a poor weekly export-sales report. The sales raised concerns that world importers might be slowing their aggressive purchases of U.S. supplies as planting conditions improve in Brazil and Argentina, the leading competitors for the U.S. in soybean production.

Chicago Board of Trade soybeans for November delivery settled down 9 1/2 cents, or 0.6%, at $14.99 1/4 a bushel. Soybeans for January delivery finished down 11 1/4 cents, or 0.7%, at $14.95 3/4.

Corn futures hovered near unchanged throughout the session. CBOT December corn finished down 3 cents, or 0.4%, to $7.41 1/4.

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