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GRAINS-Corn set for 2nd week of gains on lower U.S. output forecast

Chicago corn futures rose further on Friday with the market on track for its second week of gains as a surprise cut in U.S. output forecast underpinned the market.

Wheat bounced back on expectations that Russia, the world’s biggest supplier, will reduce grain exports.

The most-active corn contract on the Chicago Board Of Trade was up 0.4 percent at $3.70-3/4 a bushel by 0259 GMT, after hitting its highest since Aug. 22 at $3.73 a bushel on Thursday.

Corn is up 0.7 percent for the week, its second straight weekly gain. Soybeans gained 0.7 percent to $8.64-1/2 a bushel and are down half a percent this week.

“The USDA cut their U.S. production and inventory estimates.

The corn futures market liked that and promptly rallied,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

“And the heavy surge in trading volumes at the time suggested at least some buying by investors.”

The U.S. Department of Agriculture surprisingly trimmed its forecasts for both domestic corn and soybean production on Thursday, with the soy cut stemming from a reduction in acres while the corn harvest will be lower due to smaller-than-expected yields.

The corn crop was seen at 14.778 billion bushels, based on an average record yield of 180.7 bushels per acre, the government said in its monthly supply and demand report. Soybean production was pegged at 4.690 billion bushels, with yields averaging a record 53.1 bushels per acre.

In September, the agency had forecast a corn crop of 14.827 billion bushels and a soybean crop of 4.693 billion bushels.

China, the world’s top soybean buyer, brought 8.01 million tonnes of the oilseed in September, down from 9.15 million tonnes in August and below last year’s 8.11 million tonnes, according to Reuters calculations based on data released by the General Administration of Customs on Friday.

Wheat added 0.5 percent to $5.10-3/4 a bushel but the market is facing a loss of 2 percent this week.

The market expects that a smaller wheat harvest in Russia and rapid pace of exports will cause shipments to tail off in the months ahead.

Commodity funds were net buyers of Chicago Board of Trade corn, soybean, soymeal and soyoil futures contracts on Thursday and net sellers of wheat, traders said.

Grains prices at  0259 GMT
 Contract    Last    Change  Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  510.75  2.75    +0.54%   +0.05%       516.65  44
 CBOT corn   370.75  1.50    +0.41%   +2.21%       361.43  62
 CBOT soy    864.50  6.25    +0.73%   +1.44%       847.11  58
 CBOT rice   10.69   $0.00   +0.00%   -2.29%       $10.45  58
 WTI crude   71.23   $0.26   +0.37%   -2.65%       $71.39  #N/A Access Denied: User req to PE(6319)
 Euro/dlr    $1.160  $0.001  +0.09%   +0.75%               
 USD/AUD     0.7121  0.000   -0.03%   +0.86%

Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential

Source: Reuters (Reporting by Naveen Thukral; Editing by Sunil Nair)

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