Corn futures climbed Tuesday to score their first gain in six sessions after the U.S. Department of Agriculture reduced its forecast for 2021/2022 U.S. ending stocks and raised expectations for corn used for ethanol.
Wheat futures also climbed as U.S. ending stocks for the 2021/2022 marketing year were expected to remain at their lowest in 14 years.
In its monthly World Agricultural Supply and Demand Estimates report released Tuesday, the U.S. Department of Agriculture lowered its forecast for U.S. corn ending stocks for the 2021/2022 marketing year by 7 million bushels from the October estimate, to about 1.49 billion bushels.
It also lifted its forecast for corn used for ethanol by 50 million bushels to 5.25 billion bushels.
The most-active December corn contract CZ21, +0.73% rose 3 ¼ cents, or 0.6%, to settle at $5.54 ¾ a bushel after posting five straight session declines, FactSet data show.
“Corn is holding its own, with a balance sheet that borders on tightness and not much hope of a big rebuild in stock levels for the coming year, especially if ethanol demand keeps rising along with energy prices,” said Sal Gilbertie, president and chief investment officer at Teucrium Trading.
Wheat futures also climbed, with the December contract WZ21, +1.79% up 10 ½ cents, or 1.4%, at $7.78 ½ a bushel.
The USDA modestly lifted its 2021/2022 forecast for U.S. wheat ending stocks by 3 million bushels to 583 million bushels, but that’s still the lowest since 2007/2008, it said.
Meanwhile, U.S. soybean production is forecast at 4.42 billion bushels, down 23 million bushels on the back of lower yields, the report said. U.S. 2021/2022 ending stocks were forecast at 340 million bushels, down 20 million bushels from the October forecast.
January soybeans SF22, +2.02% rose 23 ½ cents, or 2%, to $12.12 a bushel.
The USDA report “surprised the markets with a drop in soybean yields and ending stocks,” said Gilbertie. “Soybeans were getting a bit oversold.”
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