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Lower Yield Reports Push Up Corn Friday

Soybeans supported by demand

DES MOINES, Iowa -- On Friday, the CME Group’s farm futures markets, closing higher, reacted to lower-than-expected corn yield reports.

At the close, the September corn futures finished 5½¢ higher at $3.16½, while December futures settled 4¾¢ higher at $3.28½ per bushel.

September soybean futures closed 9½¢ higher at $9.68½, while November soybean futures closed 8¾¢ higher at $9.52½.

September wheat futures ended 5¢ higher at $3.73¼.

September soy meal futures closed $0.60 per short ton lower at $313.70. September soy oil futures settled 0.46¢ higher at 32.66¢ per pound. 

In the outside markets, the Brent crude oil market is $1.18 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 56 points higher.

Jason Ward, Northstar Commodity’s director of grains and energy, says the price support is coming from lower-than-expected yield reports and lack of farmer-selling.

We are getting yield reports from early harvest that are less than expected,” Ward says. “This is coming from our own customers harvesting in Kansas and in Oklahoma, but also from other reliable sources in Mississippi, Missouri, and Illinois.”

A lot of the support in corn is also coming from lack of selling too, Ward says. “The old-crop corn got sold out at what looks like the low of the market. So hopefully, producers had the wherewithal to buy back some December options or some reasonable way to own it. Funds are obviously holding a huge short in corn, and maybe some of that gets covered in with these early yield reports and a new month of trade.”
 
Informa, the private analyst firm, estimated the U.S. 2016 corn yield at 174.8 bushels per acre and soybeans at 49.5 bpa.

“I thought Informa’s corn number was bearish. So, upside may be limited here in the short-term, following that number. And, FC Stone will release its new crop yield estimates after the close.

The soybean market is interesting, with little dispute of these high yield estimates of 49 or 49.5, and even whispers of 50 to 51 bushels per acre.

“We have sold off to test $9.30 support; business has certainly picked up on the break. So now we take pause and see if we hear yes or no on these new record bean yields. If we do see actual soy yields move above 50 bushels per acre, I would expect a price test of $9.00 per bushel. Keep in mind spec length is long beans and meal and underwater on all positions,” Ward says.

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