As expected, USDA on Friday trimmed its forecasts for U.S. corn and soybean harvests by lowering acreages, with the corn crop now at nearly 13.56 billion bushels and soybeans at 3.89 billion.
The numbers differed somewhat from what traders, on average, had expected and were down from USDA's September estimates of 13.59 billion and 3.94 billion.
"USDA didn't many any major changes to yields in today's reports, which is what crop ratings suggested based on Farm Service Agency data," said Bryce Knorr, Farm Futures senior grain market analyst. "The big cuts came in acreage, as we expected. Both corn and soybeans lost ground in many states outside the Plains, where the agency raised its estimate of harvest acreage compared to its last report."
Chicago soybean futures turned higher after the report, trading up 8 cents a bushel near midday. Corn futures were trading about 4 cents lower and wheat 1 to 3 cents higher.
Ending stocks for this year's corn crop were trimmed to 1.56 billion from September's1.59 billion, soybeans went to 425 million from 450 million and wheat to 861 million from 875 million.
"Overall the carryout projections were pretty close to what we expected for both corn and soybeans," said Knorr. "Export demand remains a bit weak all round and that's a concern if concerns about the health of the global economy keep money on the sidelines."
"Watch crude oil for direction: If funds buy and the price rallies, it gives crop prices much better chances for a post-harvest rally," he said.
USDA ratcheted up global wheat production by more than 1 million metric tons and ending stocks by more than 2 million. It increased crop sizes in Australia, Canada, Europe, and Ukraine.
"Today's numbers for wheat show the troubles we face in international markets, as far as 2015 supplies are concern," said Knorr. "But this market is focused on 2016, which is why futures are still higher today. Higher wheat prices would support corn too, and perhaps give growers a shot at reaching profitable levels."
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