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U.S. corn and soybean futures fell Thursday to their lowest in more than three years after the government’s forecast for high production and ending stocks across grains was bearish for agricultural futures.
At its annual Agricultural Outlook Forum, the U.S. Department of Agriculture predicted domestic corn stocks will climb 17% from the end of the 2023-24 marketing year to 2.53B bushels by the end of 2024-25, which would be the biggest jump since 1987-88, and forecast soybean ending stocks will surge 38% to 435M bushels by the end of the 2024-25 marketing year, the highest since 2019-20.
Analyst consensus estimates had projected 2024-25 U.S. corn stocks at 2.59B bushels and soybean stocks at 411M bushels.
Chinese demand for exports is expected to be weaker due to economic concerns there, which will cut into demand for U.S. crops over South American competition, the USDA’s Seth Meyer said at the agency’s outlook forum.
CBOT corn (C_1:COM) for March delivery closed -1.5% to $4.17 3/4 per bushel, and March soybeans (S_1:COM) finished -0.6% to $11.63 per bushel, with both touching their lowest levels since December 2020.
CBOT wheat futures (W_1:COM) fell the most, with the March contract ending -3.4% to $5.65 1/2 per bushel, hitting the lowest since last November, as losses were exacerbated by Russia’s pricing pressure on world exports.
ETFs: (NYSEARCA:CORN), (NYSEARCA:SOYB), (NYSEARCA:WEAT), (DBA), (MOO)
“Many of these markets are oversold, with managed money holding massive short positions,” StoneX chief commodities economist Arlan Suderman told Reuters. “Thus far there isn’t a headline to create concern among these money managers to cause them to change their positions.”