Chicago | Reuters — Chicago Board of Trade soybean futures jumped on Wednesday after weekly U.S. government data showed crop conditions deteriorated more than expected during hot, dry weather.
Reduced crop ratings fuelled expectations among traders that the U.S. Department of Agriculture may cut its yield forecast in a monthly report due next week.
USDA is already projecting domestic soy ending stocks will fall to an eight-year low in the 2023-24 marketing year, leaving little supply cushion.
The government, after grain markets closed on Tuesday, rated 53 per cent of the soybean crop as good to excellent, down five percentage points from a week earlier and below the 55 per cent that analysts expected. The corn crop’s rating also fell below expectations.
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Good-to-excellent ratings for both crops are the lowest for this time of year since 2012, a historic drought year, and renewed concerns about crop damage.
“There are key states that are now not looking great,” said Ted Seifried, chief market strategist for Zaner Ag Hedge.
In Iowa, the second biggest U.S. soybean-producing state, 49 per cent of the soy crop is in good to excellent condition, down 17 percentage points from a year ago, according to USDA data. Wisconsin’s good-excellent rating is down 23 percentage points from last year at 55 per cent.
USDA’s latest soy yield forecast, issued in August, was 50.9 bushels per acre, up from 49.5 bushels last year. A farmer survey published on Wednesday by brokerage Allendale predicted yields at 49.58 bushels.
“There is more and more talk of a soybean yield that is under 50 bushels per acre,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage.
Most-active soybean futures ended up 11-1/4 cents at $13.76-1/4 a bushel (all figures US$). Wheat futures rose 9-3/4 cents to $6.09 a bushel while corn futures finished down 1/4-cent at $4.85-3/4 a bushel at the CBOT.
The start of the U.S. harvest weighed on corn futures after the market touched a one-week high, analysts said.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
