Soybean futures on the Chicago Board of Trade (CBOT) eased on Wednesday, following a report from the U.S. Department of Agriculture (USDA) that forecast higher-than-expected U.S. soybean stocks. The report, coupled with ongoing concerns over weak Chinese demand for U.S. soybeans, weighed on the market.
The most-active soybean contract, Sv1, settled down 15-3/4 cents at $10.27-3/4 per bushel. Meanwhile, corn futures experienced a modest rise, with the CBOT corn contract (Cv1) gaining 6-1/4 cents to finish at $4.90-1/4 per bushel, driven by strong global demand. Wheat futures, however, faced choppy trading and ended lower, with CBOT wheat (Wv1) down 2-3/4 cents at $5.74-1/2 per bushel.
The USDA’s monthly report left its projections for U.S. soybean and corn end-of-season supplies unchanged, defying analyst expectations of a reduction. The agency also lowered its forecast for Argentina’s corn and soybean production, citing damage caused by severe heat and dryness. However, global soybean stocks are still expected to be ample due to a strong crop in Brazil, the world’s largest producer.
“There’s not much for the market to be bulled up on,” said Randy Place, an analyst at the Hightower Report.
Corn futures gained ground after the USDA’s forecast of global corn stocks came in below market expectations. This surge in corn prices is partly driven by anticipated declines in global inventories for 2024-25, projected to reach their lowest level in a decade due to strong demand and a smaller-than-expected U.S. harvest last year.
Brisk export demand further supported the corn market, with the USDA confirming private sales of 365,000 metric tons of U.S. corn to Mexico on Monday, followed by another sale of 130,320 tons to unknown destinations on Wednesday.
Grain traders are also keeping a close eye on weather developments, including cold fronts expected to affect the U.S. Plains and the Black Sea region. Concerns over potential freeze damage to winter wheat crops have been mitigated by forecasts for snow, which can provide insulation against freezing temperatures.
Although wheat futures declined, short covering provided some underlying support, as commodity funds continue to hold a significant net short position in wheat, leaving the market vulnerable to occasional rebounds.
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