GRAINS – Corn and Soybeans Rise on Bullish USDA Data, According to Reuters

Corn and Soybean Prices Surge on USDA Data, Wheat Rises Too

• Corn prices jump 4.5 percent following optimistic USDA data
• Soybean prices increase by 3 percent due to lower stock levels and a decrease in acreage
• Wheat prices follow the upward trend despite bearish USDA estimates

By Karl Plume

CHICAGO, March 31 – U.S. corn futures experienced a significant rise of 4.5 percent, hitting the daily limit of 30 cents on Thursday, while soybean prices soared by more than 3 percent after a government report revealed that quarterly stocks had dropped more than anticipated.

The U.S. Department of Agriculture’s (USDA) stocks report provided support for corn prices, countering pressures from a larger-than-expected spring corn acreage forecast. In contrast, soybean acreage was slightly below expectations, adding further optimism to the market following two days of gains.

Wheat prices also climbed by 3.5 percent, buoyed by the rising corn and soybean prices, despite a bearish estimate for stocks and a higher-than-expected increase in the USDA’s forecast for spring wheat seedings.

While corn and soybeans were on track for a fourth consecutive quarterly rise, wheat was set to record its first quarterly drop in a year.

"The key takeaway from the USDA report was the corn stocks figure, which reflects demand and the amount of corn entering the marketing channel. The significant decline indicates that demand has not been rationed," commented Jerry Gidel, an analyst with North America Risk Management Inc.

He noted that the data suggests feed demand remains robust, contrary to some expectations, and that ethanol production is likely maintaining strength.

Supporting this upward trend in corn prices were stronger-than-expected weekly export sales, which totaled 2.2 million tons last week.

As of 10:09 a.m. CDT, Chicago Board of Trade May corn futures reached the daily limit of $6.93-1/4 per bushel, with traders indicating synthetic trading prices as high as $7.24 per bushel, marking a three-week high.

May soybean futures rose by 44 cents, or 3.2 percent, reaching $14.16 per bushel after peaking earlier at a seven-week high of $14.32.

May wheat futures increased by 25-1/4 cents, or 3.5 percent, bringing the price to $7.52-1/2 per bushel, with an earlier peak of $7.60-1/2.

While corn and wheat were poised to finish the month of March lower, soybeans were set to rebound, indicating gains in six out of seven months following a dip in February.

Bullish Stocks Outweigh Acreage Concerns

On Wednesday, investors reacted more favorably to the USDA’s positive March 1 corn and soybean stocks estimates than to its prospective planting forecasts, which fell within the expected range.

Farmers might still make adjustments to the acreage allocated for each crop in the upcoming weeks, which will be reflected in the USDA’s acreage report scheduled for June 30.

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

In the eagerly anticipated prospective plantings report released on Thursday, USDA indicated corn seeding at 92.178 million acres and soybean plantings at 76.609 million acres, both within the expected range prior to the report.

"The corn acreage is at the high end of the range, but the stocks number takes precedence. For soybeans, there is a tightening of both acreage and stocks, indicating that rationing will be necessary," stated Don Roose, an analyst at U.S. Commodities in West Des Moines, Iowa.