GRAINS-Soy climbs on supply worries ahead of USDA reports; wheat, corn gain
By Julie Ingwersen
CHICAGO, July 11 (Reuters) – U.S. soybean futures rose for a second session on Tuesday as traders braced for a monthly U.S. government crop report due on Wednesday that is expected to project a smaller crop and tighter supplies, analysts said.
Wheat futures rose as a drone strike on Ukraine’s Odesa port put attention back on war risks to Black Sea supply, while a surprise drop in a U.S. spring wheat crop rating underscored mixed harvest prospects.
Corn tracked strength in wheat and soybeans, but gains were capped by a sharp improvement in U.S. crop conditions and forecasts for plentiful supplies.
As of 12:49 p.m. CDT (1749 GMT), Chicago Board of Trade November soybean futures SX3 were up 15-3/4 cents at $13.61-1/4 per bushel. September wheat WU3 was up 15-1/4 cents at $6.61-1/2 a bushel and December corn CZ3 was up 1-1/2 cents at $5.01 a bushel.
Soybean futures rose after the U.S. Department of Agriculture (USDA) late on Monday rated 51% of the U.S. soy crop in good-to-excellent condition, up from 50% last week but below analysts’average estimate of 52%. In Illinois, the top U.S. soybean producer, 36% of the crop was rated good to excellent, up from 30% the prior week but still among the lowest ratings in the Midwest crop belt. US/SOY
“You have Illinois with some of the bigger producers, and some of the worst ratings,” said Tom Fritz, a partner with EFG Group in Chicago. “To me, soybeans need some weather premium,” Fritz said.
Analysts expect the USDA in a monthly supply/demand report due on Wednesday to cut its forecast for the U.S. soybean harvest, after the agency slashed its soy plantings estimate in a June 30 acreage report. Soybean ending stocks for the 2023/24 marketing year are expected to tighten as well.
For corn, analysts expect only modest changes to the USDA’s production and 2023/24 ending stocks forecasts, while sluggish demand for the grain remains a worry as farmers in Brazil continue to harvest a bumper corn crop.
Meanwhile, the USDA on Monday rated 55% of the U.S. corn crop as good to excellent, up from 51% last week. However, the rating is the worst for this time of year since the drought year of 2012.
The USDA rated 47% of the spring wheat crop as good to excellent, down from 48% a week ago, defying analysts’ expectations for an improvement.
(Reporting by Julie Ingwersen; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; editing by Sonia Cheema, Jason Neely and Paul Simao)
((Julie.ingwersen@thomsonreuters.com; 1-313-484-5283; Reuters Messaging: julie.ingwersen.thomsonreuters.com@reuters.net))
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