📈 Fed's first cut since 2020: Time to buy the dip? See Tech-focused stock picksUnlock AI Picks

GRAINS-Corn, soybeans surge on bullish USDA data

Published 03/31/2011, 11:29 AM
Updated 03/31/2011, 11:32 AM
BIG
-

* Corn limit up, rises 4.5 percent on bullish USDA data

* Soybeans up 3 percent on lower stocks, acreage decline

* Wheat follows corn, soy higher despite bearish USDA data (Recasts, updates with U.S. market opening, adds quote, links to graphics)

By Karl Plume

CHICAGO, March 31 (Reuters) - U.S. corn futures surged 4.5 percent and by the daily 30-cent trading limit on Thursday, while soybeans jumped more than 3 percent after a government report showed quarterly stocks shrunk more than expected.

The U.S. Agriculture Department stocks data offset pressure from a higher-than-expected spring corn acreage outlook. Soy acres were slightly below expectations, giving additional support to futures that have risen the past two days.

Wheat rose 3.5 percent, following soaring corn and soybeans despite a bearish stocks estimate and a larger-than-expected jump in the USDA's spring wheat seedings forecast.

Corn and soybeans were in position to rise for a fourth consecutive quarter, but wheat was poised for its first quarterly drop in a year.

"The big number was USDA's corn stocks number, which is a reflection of demand and how much corn is moving into the marketing channel. The substantial drop suggests we have not rationed any corn demand," said Jerry Gidel, analyst for North America Risk Management Inc.

"The number suggests feed demand has not declined as some had expected and it suggests ethanol production is staying very strong," he said.

Stronger-than-expected weekly corn export sales last week which totaled 2.2 million tonnes further supported corn.

Chicago Board of Trade May corn futures were up the 30-cent daily limit at $6.93-1/4 per bushel as of 10:09 a.m. CDT (1509 GMT). The contract was trading synthetically through options as high as $7.24 a bushel, according to traders, which would be a three-week high.

CBOT May soybeans rose 44 cents, or 3.2 percent, to $14.16 a bushel after earlier hitting a seven-week high of $14.32.

CBOT May wheat jumped 25-1/4 cents, or 3.5 percent, to $7.52-1/2 a bushel. The contract earlier touched a three-week high of $7.60-1/2.

Corn and wheat were set to close lower for the month of March, while soybeans were in position to rebound from a February dip with a sixth month of gains in seven months.

BULLISH STOCKS TRUMP ACREAGE

Investors on Wednesday focused more on the USDA's bullish March 1 corn and soybean stocks estimates than on prospective plantings forecasts that were within the range of pre-report estimates.

Farmers may yet adjust the area devoted to each crop in coming weeks. Such changes will show up in the USDA's acreage report on June 30.

USDA pegged March 1 corn stocks at 6.523 billion bushels and soybean stocks at 1.249 billion bushels, both below the range of trade estimates.

USDA's eagerly awaited prospective plantings report on Thursday pegged corn seedings at 92.178 million acres and soybean plantings at 76.609 million acres, both within the range of pre-report estimates.

"The corn acreage is at the top end of the range but it is the stocks number that kind of trumps this one. On soybeans, you have an issue with not enough acres and stocks too tight. You are going to have to ration," said Don Roose, an analyst at U.S. Commodities, West Des Moines, Iowa. (Additional reporting by Sam Nelson, Mark Weinraub and Michael Hirtzer; Editing by Lisa Shumaker)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.