Shutterstock photo
Markets

Grain futures - Corn extends gains on bullish USDA supply report

Shutterstock photo

Shutterstock photo

Investing.com - U.S. grain futures were higher on Monday, with corn prices extending gains from the previous session when the U.S. Department of Agriculture released its closely-watched monthly report on U.S. and global grain supplies.

On the Chicago Mercantile Exchange, corn futures for May delivery traded at USD7.0838 a bushel, up 0.6% on the day. The May contract rose by as much as 0.75% earlier in the day to hit a session high of USD7.0988 a bushel, the strongest level since March 5.

Corn futures rallied almost 2% on Friday after the USDA said U.S. stockpiles before the next harvest will total 632 million bushels on August 31, unchanged from last month's forecast and a 17-year low.

Market players expected the USDA to raise its supply estimate to 649 million bushels.

The USDA also revised up its forecast for the amount of U.S. corn that will be used for animal feed and "residual" purposes by 2.2% to 4.55 billion bushels, while lowering its projection for U.S. corn exports in the current marketing year.

Meanwhile, soybeans futures for May delivery traded at USD14.7762 a bushel, up 0.45% on the day. The May contract rose by as much as 0.8% earlier in the day to hit a session high of USD14.8388 a bushel.

Soy's gains were limited after the USDA left unchanged its forecast for domestic soybean stocks as of August 31 at 125 million bushels. Market analysts' expected the agency to cut its estimate to 122 million bushels.

Expectations for bumper crops in major South American soy growers also added to the selling pressure.

The USDA said Brazil will harvest a record 83.5 million tonnes of soybeans this spring, on pace to pass the U.S. as the top producer for the first time.

Global soybean inventories at the end of the current marketing year on October 1 will total 60.21 million metric tons, up from the 60.12 million estimated in February. A year earlier, supplies totaled a 55.25 million metric tons.

Elsewhere, wheat for May delivery traded at USD6.9925 a bushel, up 0.3% on the day. The May contract rose by as much as 0.9% earlier in the day to hit a session high of USD7.0425 a bushel.

The USDA raised its forecasts for U.S. wheat reserves at the end of the crop's current marketing year on May 31 to 716 million bushels, 3.6% higher than the agency's February estimate of 691 million bushels and above expectations for an increase to 702 million bushels.

The upward revision reflected a decline in U.S. wheat export estimates due to stronger-than-expected foreign competition and plentiful supplies around the world.

Global wheat inventories at the end of the year will total 178.23 million metric tons, up from the month-earlier estimate of 176.73 million

Wheat futures have been on a downward spiral in recent weeks after a winter storm brought much-needed moisture to drought-stricken wheat-growing areas in the U.S. Great Plains in late-February.

Prices fell to an eight-month low of USD6.8125 a bushel on March 6.

Wheat traders have been closely monitoring weather and crop conditions in the area, where prolonged dryness threatens dormant winter wheat crops.

Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.

Investing.com - Investing.com offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

Read more News on Investing.com or Follow us on Twitter at @ Newsinvesting

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

ForEx