Chicago Close: Soys, Corn Jump on Bullish USDA

A bullish USDA supply-demand update helped to lift soybean futures to big gains to end the week. Corn was also higher while wheat ended mixed.

Soy futures were already up double digits on aggressive fund buying prior to the USDA report and ended up hitting their highest since March, 2018. The USDA said US soybean ending stocks for the current marketing year will fall to just 290 million bu, down a major 170 million bu from the September estimate and well below trade ideas. The decline in ending stocks was due to an upward revision in the export forecast and a downgrade in the size of the 2020 crop. Dryness in Brazil, where the 2020-21 soybean crop is now being planted, further underpinned the market. November beans were up 15 ½ cents at $10.65 ½ and January closed 17 ¾ cents higher at $10.65 ¾.

Corn was boosted as the USDA trimmed forecasted nationwide 2020 corn production by 178 million bu from last month to 14.722 billion bu, while projected 2020-21 ending stocks dropped 336 million bu to 2.167 billion. The drop in production was steeper than expected by traders and analysts. December corn gained 8 cents to $3.95 and March was up 7 ½ cents at $4.02 ¼.

The news for wheat was mixed. The USDA lowered US all wheat ending stocks by 42 million bu from last month to 883 million – potentially the lowest in six years. On the other hand, projected world ending stocks were raised 2.1 million tonnes from September to a new high of 321.5 million, with Russia accounting for most of the increase. Dryness on the southern US Plains for the 2021 US winter wheat crop continues to be a supportive influence. December Chicago slipped 1 ½ cents to $5.93 ¾, December Kansas City gained 6 ¾ cents to $5.35 ½ and December Minneapolis was up 1 ¼ cents at $5.43 ¾.

Live cattle were mostly lower today. Lean hogs closed mainly higher.

Source: DePutter Publishing Ltd.

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