Harvest pressure hits prices before USA crop reports

Based on conditions as of Oct. 1, yields are expected to average 168 bushels per acre, up 0.5 bushel from the September forecast but down 3 bushels from 2014, according USDA’s October National Agricultural Statistics Service (NASS) report.

US grain futures on Thursday extended a setback from 10-week highs reached a session earlier, pressured by an influx of fresh supplies from USA harvests and profit taking ahead of the release of highly anticipated crop data.

The estimated 2015-’16 beginning corn stocks of 1.732 billion bushels, obtained from the USDA September 30 Grain Stocks report, are almost unchanged from last month’s projection. Analysts were expecting soy production of 3.908 billion bushels and a yield of 47.2 bushels per acre.

If realized, soybean production and yield would be the second biggest on record.

However, futures recovered from an early tumble to stand at $5.18 ½ a bushel, a gain of 1.4%, as investors questioned a few of the assumptions in the Wasde, including cuts to estimates for USA exports and feed use of wheat.

The USDA is expected to trim USA wheat stocks in its monthly report, and also lower corn and soybean stockpiles. No purchase has yet been made and results are expected later on Friday, they said.

“Wheat importers are back in the market”, a European trader said, noting a purchase by Algeria and a pending tender by Saudi Arabia.

The Russian government has proposed lower its current wheat export tariff, which may open the floodgates for wheat shipments, given the country is set to harvest a record crop of over 60 million tonnes!

“Increased yield potential is supported by satellite imagery”.

Soybean prices led the declines, easing as largely favorable weather allowed growers to make rapid harvest progress in the U.S. Farm Belt, adding supplies to the market.

“Detrimental springtime conditions have certainly taken the edge off” crops in South Australia, Victoria and Western Australia too, the grain trader said.