Chicago Close: Huge Gains in Post-USDA Trade




Chicago crop futures surged in post-USDA trade on Tuesday, with the nearby March corn contract closing up the daily limit at a 6 ½-year high.


The bulk of the gas for corn’s move higher came as the USDA trimmed its 2020 production estimate more than expected. The USDA lowered the average national yield to 172 bu/acre from 175.8 bu in December, a move that took production down 324 million bu to 14.182 billion bu. Today’s grain stocks report was bullish as well, with the USDA pegging total American stockpiles of corn as of Dec. 1 at 11.3 billion bu, down from a year ago and well below the average trade guess of 11.95 billion. March corn jumped 25 cents to $5.17 ¼ and December climbed 16 ¾ cents to $4.57 ½.


Soybeans roared higher as the USDA further reduced projected 2020-21 US soy ending stocks by 35 million bu from December to 140 million bu. If accurate, it will be the lowest US soybean ending stocks since 2013-14, when stockpiles dwindled to just 92 million bu. Production was cut too, with the USDA lowering the average national yield by 0.5 bu to 50.2 bu/acre. March beans added 45 ¾ cents to $14.18 ¼ and new-crop November was 21 ½ cents higher at $11.76 ½.


Wheat moved higher after the USDA cut estimated 2020-21 US and global wheat ending stocks. US wheat ending stocks were trimmed 26 million bu from last month to 836 million, down 19% from a year earlier, while world ending stocks were lowered 3.3 million tonnes to 313.2 million, although that remains record heavy. March Chicago wheat gained 30 ¼ cents to $6.65, March Kansas City closed 28 ½ cents higher at $6.22 ½ and March Minneapolis was up 14 ¾ cents at $6.20 ¾.


Live cattle closed mostly lower today. Lean hogs ended higher.


Source: DePutter Publishing Ltd.

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