Corn futures recovered to close in positive territory, while soybean prices recouped some losses, after crop estimate revisions from Informa Economics - in a report which one broker said "fired up controversy" - defied expectations of upbeat data.
Informa Economics had been expected, in the latest of a
series of crop numbers from brokers, to suggest that official data for the
domestic corn and soybean harvests were too downbeat.
"The trade anticipates bearish numbers with Informa using
better corn and bean yield estimates in their weekly updates," Benson Quinn
Commodities said ahead of the data.
US Commodities said: "The trade is braced for bearish yield
and production estimates," adding that the Informa data will "get more respect"
than broker data put out earlier this week, as the analysis group "uses
The spree of estimates has been prompted by the prospect on Wednesday
of the US Department of Agriculture's monthly Wasde crop report, a key part of
the agricultural commodities calendar.
However, Informa, in its pre-Wasde forecasts, cut its
forecast for the US corn yield to 119.8 bushels per acre, and for production by
28m bushels to 10.310bn bushels.
|Informa pre-Wasde estimates for US crops, and (change on previous)|
Corn - yield: 119.8 bushels per acre, (-0.9 bushels per acre)
Harvest: 10.310bn bushels, (-28m bushels)
Soybeans - yield: 35.4 bushels per acre, (-1.8 bushels per acre)
Harvest: 2.639bn bushels, (-52m bushels)
Both figures are below the current USDA estimates.
On soybeans, it reduced its estimate for the yield
to 35.4 bushels per acre and for the harvest to 2.639bn bushels, numbers which were
also below government figures.
Soybean yield estimates have come under particular scrutiny
since broker FCStone this week pegged the soybean yield at 36.7 bushels per
acre, above the government estimate, and suggesting that rains since last month
had fostered some crop recovery.
However, as they have sometime done previously, Informa also
issued separate - and higher - estimates for where they believed the US crop
figures would end up in final estimates - of 11.030bn bushels for corn and
2.791bn bushels for soybeans, although the data were given short shrift by some
"Informa really fired up the controversy this
morning," Darrell Holaday at Country Futures said, saying that the
publication of two estimates "sounds crazy".
"My point is that if the final crop is going to 11.03bn
bushels, the USDA figure will not be 10.3bn bushels next Wednesday," in
the Wasde report.
Informa "did the same thing back in 2009 by indicating
that the crop would be down in the estimate, but increase 400m bushels in the
In fact, the full-year estimate "was not correct as the
crop size continued to decline".
Recovery, then retreat
Indeed, in Chicago, investors largely ignored the higher number to fuel a revival in corn and soybean
futures, which had fallen earlier on poor US export data.
Weekly corn export sales came in at a net 25,000 tonnes,
once a slew of cancellations from the likes of China, Japan and South Korea
were factored in, well below forecasts of at worst 200,000 tonnes.
Soybean export sales, at a little over 525,000 tonnes, were
down more than one-quarter week on week, and compared with forecasts of a
figure of at least 700,000 tonnes.
However, the rally faded in late deals, to see December corn close up 0.25 cents at $7.99 ½ a bushel in late morning deals.
Soybeans for November finished 0.7% lower at $17.36 ½ a bushel.
The recoveries in row crop values added extra momentum to a
rally in wheat futures too, which gained support from fears for Argentine and Australian crops, and from firm US export data.
Export sales, at 573,000 tonnes, came in towards the top of
the range of market forecasts, and were up one-quarter week on week.
Chicago wheat for December delivery added 1.5% to $9.05 a