Chicago | Reuters – Chicago Board of Trade soybeans and corn rose on Friday, extending their recovery from three-year lows hit last month, after the U.S. Department of Agriculture (USDA) reported an uneventful monthly supply/demand report, analysts said.
High global grain inventories and strong competition for exports continued to stabilize prices, but the worst news is likely priced into prices for now, said Rich Nelson, chief strategist at Allendale Inc.
“We have been repeatedly plagued with terrible news and perhaps we have experienced the worst of it. I think we’ve hit rock bottom for now,” Nelson said.
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Few changes in March USDA report
The U.S. Department of Agriculture's (USDA) monthly supply/demand estimates released March 8 remained largely unchanged, with the exception of South American corn and soybeans and U.S. wheat.
Chicago Board of Trade (CBOT) WK24 May wheat rose 9-1/4 cents at $5.37-3/4 a bushel. Corn CK24 rose 1-3/4 cents to $4.39-3/4 a bushel and corn-soybean SK24 rose 17-3/4 cents to $11.84 a bushel.
For the week, benchmark corn futures rose 3.8 percent and soybeans rose 2.8 percent, while wheat fell 3.6 percent.
Commodity funds hold large net short positions in all three commodities, leaving markets vulnerable to periods of shorting.
In its monthly supply/demand report, the USDA slightly revised down its estimates for Brazil's soybean harvest, global soybean stocks and global corn stocks. But the forecast for Brazil's soybean crop was 155 million tons, above the average of estimates from analysts polled by Reuters.
“This is a neutral report, nothing special,” said Ted Seifried, chief market strategist at Zaner Group.
Seifried was cautiously optimistic about the market's reaction to the report.
“It's a sigh of relief. With the publication of the report, we have clearly left our lows behind us,” said Seifried. “We are back where we were yesterday.”
Wheat posted the largest percentage gain on Friday, rebounding from a multi-year low set earlier in the session. Values slumped after the USDA announced that China had halted further purchases of U.S. common wheat. The USDA confirmed the cancellation of 130,000 tons of grain on Thursday and another 110,000 tons on Friday.
Traders had heard rumors about the cancellations and had already priced the news into the market, Seifried said.
Echoing concerns about export demand for U.S. wheat, the USDA lowered its forecast for 2023/24 U.S. wheat exports to 710 million bushels from 725 million previously in its monthly report.
–Additional reporting for Reuters by Naveen Thukral.
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