Grains Forecast Is Breath of Fresh Air for Market Bulls
(Bloomberg) -- After months of dealing with gloom in the grain markets, corn bulls were delivered some relief as the U.S. Department of Agriculture forecast smaller-than-expected domestic production. But the euphoria didn’t last when it came to soybeans and wheat.
In one of the biggest recent surprises for the corn market, the USDA cut its outlook for domestic yields. Reductions for Illinois and Iowa helped pulled the national number lower. While it’s still projected at a record high, that little bit of respite was enough to get the market moving. Corn futures in Chicago jumped as much as 2.8 percent, the most since Oct. 1.
“This is a rather friendly report for corn,” Ted Seifried, chief market strategist for Zaner Ag Hedge in Chicago, said in an email.
While soybeans initially took off after the USDA’s outlook for domestic inventories came in under analyst forecasts, futures pared their gains as traders started to shift their focus on the fact that supplies will still be plentiful.
Wheat futures ended the day lower, erasing earlier advances. Even as the USDA cut its forecast for the global crop in its World Agricultural Supply and Demand Estimates, the agency left its outlook for U.S. exports unchanged, disappointing bulls.
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