CHICAGO, Oct. 10 (Xinhua) -- CBOT agricultural futures in the past week rose higher, with corn and soybean touching records on slightly bullish U.S. Department of Agriculture (USDA) October Crop report, said Chicago-based research company AgResource.
Spot CBOT corn rallied to a new 12-month high. USDA in its October World Agricultural Supply and Demand Estimate (WASDE) report lowered projected 2020 U.S. end stocks to 2.2 billion bushels. This validates the recent rally. Basis levels in South America and across the Black Sea Region are rising, and this will keep U.S. corn competitive in the world marketplace. Large supplies and large demand will elevate volatility into early 2021, which is welcomed and will provide numerous trading/pricing opportunities, AgResource noted.
Corn price determination will now be driven by South American weather, AgResource predicted.
U.S. wheat futures ended sharply higher amid ongoing concern over dryness and new crop winter wheat production potential in the Black Sea, and to a lesser extent across the Southern Plains. World cash prices have found new seasonal highs. AgResource predicted that whether wheat futures could exceed or fall below the level of 6.00 to 6.20 dollars in 2020-2021 will hinge upon the duration of drought in the United States, Eastern Ukraine and Russia.
The 2021-2022 Russian production loss hasn't yet occurred and will be highly difficult to quantify until spring. AgResource is expecting a wide swinging market into late year.
Soybean futures marked another week of strong gains, with spot futures trading to the highest prices since January 2017. The U.S. export program is likely to reach weekly records, said AgResource. This is keeping basis at both the Gulf and interior locations well above average.
The USDA October Crop report offered a bullish surprise with U.S. harvest acreage falling 731,000 acres from the June estimate. The national average yield was unchanged at 51.9 bushels per acre (BPA), but the smaller acreage figure cut production by 45 million bushels. While the old crop carry-in was down 52 million bushels, total use increased 74 million bushels on a larger export forecast. The result was a 170-million-bushel drop in the 2020-2021 stocks to 290 million bushels.
The U.S. harvest will have passed the 50-percent mark this week on fantastic fall weather. AgResource estimated that by Sunday, 59 percent to 63 percent of the U.S. crop will have been cut.
Record U.S. exports are expected into early 2021. The market will now focus on South American weather to gauge when Brazilian exports can begin in size. Enditem
