Chicago | Reuters — Chicago Board of Trade (CBOT) soybean futures soared on Tuesday after the U.S. Department of Agriculture reduced its estimate for domestic yields, surprising traders who were expecting an increase.
USDA pegged production at 4.425 billion bushels on a yield of 51.2 bushels per acre in a monthly crop report. That was below analyst expectations for a harvest of 4.484 billion bushels with a yield of 51.9 bushels, and down from USDA’s October forecast for a 4.448 billion-bushel crop with a yield of 51.5 bushels.
The yield cut took traders by surprise after CBOT soybean futures had dropped to their lowest price since December 2020 ahead of the report.
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“They’ve been killing the bean side on talk that bean yields would go up, and what happened? Bean yields went down,” said Jim Gerlach, president of broker A/C Trading in Indiana.
The most active CBOT soybean contract ended 23-1/2 cents higher at $12.12 a bushel, after dropping earlier in the session to $11.81-1/4 (all figures US$).
Favourable planting conditions for soybeans in Brazil and easing Chinese import demand have recently added to pressure on soybean futures.
Spillover support from Tuesday’s rally helped lift CBOT corn by 3-1/4 cents to $5.54-3/4 a bushel. CBOT wheat ended up 10-1/2 cents at $7.78-1/2 a bushel.
The USDA report showed U.S. corn output will be bigger than previously projected, as farmers recorded their highest yield ever. The agency trimmed its estimate for the U.S. 2021-22 corn carryout from last month and raised its outlook for U.S. soybean ending stocks.
“Corn carryover came down on a higher yield so that, in and of itself, is bullish,” said Ted Seifried, chief ag market strategist for Zaner Group.
Global wheat ending stocks were pegged at 275.8 million tonnes, below analyst estimates for 276.5 million and down from USDA’s October estimate of 277.18 million.
— Reporting for Reuters by Tom Polansek in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore; additional reporting by Karl Plume in Chicago.
