Corn and soybean futures were catching their breath Tuesday morning, after jumping to multi-month highs the previous two days on the heels of a bullish USDA report.
After hitting the highest in about a year at US$4.77 earlier in the day, the nearby March corn contract settled Monday at $4.76 ½. That represents a gain of more than 20 cents or 4.5% from the Thursday close of $4.56 - before the release of the USDA’s monthly supply-demand update on Friday that spurred two straight days of strong gains.
Meanwhile, March soybeans closed Monday at $10.53, up 54 cents or 5.4% from the Thursday close of $9.99. Earlier today, the March soy contract touched $10.55, the highest since October. (See March corn and soybean futures charts below).
Gains in corn were fueled after Friday’s USDA report lowered this year’s US average yield to 179.3 bu/acre, down 3.8 bu from the previous month, but still a new record high. Although the yield reduction was partially offset by a 200,000-acre increase in harvested area, production was cut 276 million bu to 14.867 billion, down 3% on the year. With the smaller crop, ending stocks ended up at 1.54 billion bu, versus 1.763 billion in 2023-24.
For soybeans, the USDA also lowered the average yield, down 1 bu from December and just ever slightly above the 2023 average of 50.6 bu. With the reduction in the average yield, combined with a 200,000-acre cut in harvested area to 86.1 million, the 2024 soybean production estimate was dropped 95 million bu to 4.366 billion, still up about 5% on the year. With production falling, the USDA lowered its US soybean ending stocks estimate to 380 million bu, down 90 million bu from last month.
The cuts to the corn and soybean supply-demand estimates were deeper than expected by the trade, setting the stage for the past two days of gains.
Recent dryness for corn and soybean crops in Argentina has offered support to the markets as well, but huge production potential in Brazil remains an overhanging factor, even if the soy harvest in the latter country is off to a slow start because of rain.
March corn: source – Barchart
March soybeans: source – Barchart
