Roundup: CBOT agricultural futures performance mixed

Chicago (US), October 3: CBOT agricultural futures staged a mixed performance in the past week after the U.S. Department of Agriculture (USDA) released September crop stocks report.
But Chicago-based research company AgResource stays bullish of grain, as investors try to understand the new natural rate of U.S. inflation.
December corn rallied to a new four-week high as USDA stocks data failed to alter the risk of extreme U.S. and exporter balance sheet tightness. USDA did add 49 million bushels to U.S. carryover supplies, but this reflects just 0.3 percent of total supplies. A yield reduction of just 0.5 bushel per acre will offset higher carryover, and AgResource points to a final yield of 168-173 bushels per acre (BPA). Such a yield will pull new crop corn end stocks below 1,000 million bushels.
Bullish international markets linger in the background. Spot Brazilian corn remains reluctant to drop below 7.00 dollars and EU corn is now quoted at 7.15 dollars. A lengthy period of dryness lies ahead in Argentina during early seeding, and a rapidly strengthening La Nina bodes negatively for autumn/winter precipitation in Argentina and far Southern Brazil.
AgResource remains bullish on the outlook of corn until new crop U.S. seedings are known next spring.
U.S. wheat futures ended sharply higher as bullish vigor returned. Most important is that importer demand through late September remains record large. Additional, sources indicate that even Russian government doubts Russian exports in 2021-2022 will exceed 31 million metric tons.
Chart patterns have turned bullish, with spot CBOT futures having breached all major moving averages and scoring new 30-day highs. Funds in Chicago are net short wheat and world market needs to secure an additional 7 million acres to balance supply/demand in 2022. Breaks should be used to add to any existing purchases. AgResource holds the upside price targets for wheat futures at 8.50-9.00 dollars.
November soybean fell to the lowest level since mid-June while spot futures were the cheapest since December 2020. Early week trend was back and forth in a lower trend and the market fell sharply following the September grain stocks report. The report showed U.S. soybean stocks were down 51 percent from a year ago and the smallest in seven years. However, Sept. 1 stocks of 256 million bushels were 84 million bushels over the average trade estimates. This is the largest difference between reported stocks and expectations since 2008, and the second largest on record. The report release sent soybean sharply lower.
CBOT soybeans are technically weak. Domestic cash basis is near normal and should confirm a low in the coming weeks. New sales are not advised, but AgResource expects to see more aggressive sellers on rallies to 13.25-13.75 dollars heading into early 2022.
Source: Xinhua