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Soybeans, Corn Close Mixed as Traders Skeptical of Bearish WASDE Report

USDA Raises Production Estimates Beyond Expectations


Soybean futures closed modestly lower and corn prices rose after the U.S. Department of Agriculture raised its production estimates in a monthly report on Friday.

Soybean production in the 2016-2017 marketing year that starts on Sept. 1 is forecast at 4.06 billion busels, well above last month's outlook for 3.88 billion and analyst expectations for 3.95 billion bushels, the USDA said in its monthly World Agricultural Supply and Demand Estimates report. Yield is pegged at 48.9 bushels an acre, above July's projection of 46.7 bushels and estimates for 47.6 bushels. 

Corn output is forecast by the government at 15.2 billion bushels, up from 14.5 billion projected last month and analyst expectations of 14.8 billion, the USDA said. Yield is pegged at 175.1 bushels an acre, up from July’s projection of 168 bushels and analyst estimates of 170.8 bushels an acre.

While the numbers were, on the surface, bearish for futures, traders aren't fully convinced that production will rise as much as the USDA expects. Frank J. Cholly, a senior commodities broker at RJO Futures in Chicago, said the numbers are "big" but are "still to be determined." The government is overestimating the size of the U.S. crop and underestimating exports for soybeans, he said. 

Soybean futures for November delivery fell 1¢ to $9.83 a bushel on the Chicago Board of Trade. Soy meal lost $1.10 to $328.80 a short ton, and soy oil added 0.19¢ to 32.40¢ a pound.

Corn futures rose 1 3/4¢ to $3.33 1/2 a bushel in Chicago. 

Chicago wheat futures added 5 3/4¢ to $4.22 a bushel and Kansas City futures rose 3¢ to $4.15 1/4 a bushel on the Board of Trade. 

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