Corn Futures Advance as USDA Cuts Outlook for Domestic Yield

Bloomberg writers Megan Durisin and Shruti Singh reported yesterday that, “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.”

The Illinois corn yield forecast for October was two bushels below the September estimate. USDA- National Agricultural Statistics Service (October 11, 2018).

The Bloomberg article added that, “For soybeans, U.S. stockpiles won’t bulge as much as some analysts had feared, while they’re still forecast at an all-time high. That could signal a storage crunch ahead in the Midwest.”

“As the soybean harvest accelerates, analysts and traders are also tracking snow in the Dakotas and recent rains in other parts of the Midwest that have hampered crop gathering,” the Bloomberg article noted.

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