Soft Commodities Price Watch: USDA Supply Data Lifts Grain Futures

on Aug 13, 2013
Listen Tuesday, August 13th: Grain futures were broadly higher today after the release of the U.S. Department of Agriculture’s (USDA) latest monthly domestic supply report.

The USDA has lowered its forecast for the U.S. soybean crop to 3.255 billion bushels, down five percent from its July estimate. The department has also cut its soybean yield-per-acre forecast to 42.6 bushels, down from a prior reading of 44.5 bushels.
As a result, the soybean price today climbed, extending its biggest gain in 13 months. The contract for November delivery on the Chicago Board of Trade (CBOT) jumped as much as 0.8 percent to $12.3525 a bushel, the highest since July 25. Futures rallied 3.6 percent yesterday, the biggest gain since June 2012.

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Elsewhere on the CBOT, the corn price for December delivery was little changed at $4.645 a bushel after swinging between gains and losses. Prices yesterday dropped to $4.465 a bushel, the lowest since September 2010, before rallying 2.4 percent to close at $4.64 a bushel.
According to the USDA’s latest report, the U.S. corn crop will total 13.8 billion bushels, down 1.3 percent from the department’s July forecast. The government has also lowered projected yields to 154.4 bushels an acre, from 156.5 last month. The report has further shown that corn stockpiles prior to next year’s harvest will total 1.837 billion bushels, down six percent from USDA’s July forecast.

Among other grains, wheat for delivery in December today advanced 0.3 percent to $6.51 a bushel. The USDA kept wheat production estimate for the 2013-14 marketing year unchanged at 2.114 billion bushels. The Department of Agriculture said that it expected the global wheat production to total 705.4 million tonnes this year, an all-time high.

**Sugar Hits Six-Week High**
Sugar today rose to a six-week high in New York on concerns that colder weather in leading producer Brazil could further damage this year’s crop.
Bloomberg quoted Judy Ganes-Chase, president of J. Ganes Consulting LLC, as saying yesterday: “The weather in Brazil has captured the sugar market’s attention again with forecasts for some rainy, cool weather in the upcoming period. This could cause some further disruptions to the harvest, but I don’t see it as a need to wave bull flags yet.”

Raw sugar for October delivery today rose 0.5 percent to $0.1724 a pound on ICE Futures U.S. in New York. Earlier in the session it hit $0.1729 a pound, the highest price level since June 27. The white sugar price for delivery in October climbed one percent to $505 a metric tonne on NYSE Liffe in London.
Among other soft commodities, the cocoa price for December delivery fell 0.9 percent to $2,476 a tonne on ICE. The September contract fell 0.9 percent to £1,641 pounds a tonne on NYSE Liffe. Elsewhere, the Arabica coffee price for December delivery rose 0.2 percent to $1.2635 a pound in New York. Robusta coffee for delivery in November fell 1 percent to $1,936 a tonne in London.


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