Soybeans, Cotton Lead Surge Following USDA Report
November 9, 2010 By Tom Polansek
Of DOW JONES NEWSWIRES
U.S. soybean futures surged to a 26-month high Tuesday as federal forecasters cut estimates for this year’s harvest in a crop report that showed tightening supplies across agricultural commodities.
The closely-watched monthly report from U.S. Department of Agriculture, or USDA, sent futures for cotton, corn and wheat higher. Cotton futures hit an exchange-imposed trading limit as the report noted lower production and higher exports of U.S. cotton. The department also trimmed its forecast for the U.S. corn harvest for the third time this year, although the cut was in line with expectations.
Still, “the report puts soybeans as the leader to the upside in the grain complex,” said Mike Zuzolo, president of Global Commodity Analytics & Consulting, an Indiana-brokerage firm.
U.S. soybean futures at the Chicago Board of Trade climbed 54 1/2 cents, or 4.3 percent, to $13.19 a bushel, which is a 26-month high. U.S. corn futures reached a 27-month high above $6 a bushel and recently traded up 8 cents, or 1.4 percent, to $5.93 3/4 a bushel. U.S. cotton futures on IntercontinentalExchange traded 5 cents, or 3.4 percent, higher at $1.5123 a pound, which is the exchange-imposed limit on one-day gains.
According to the new government estimates, soybean supplies are projected to tighten as the USDA pegged production at 3.375 billion bushels, down 1 percent from the government’s October estimate. Analysts had expected a slight increase from last month. Even with the cut in the estimates, the soybean harvest would be the largest on record in the U.S.
Feverish buying by China, the world’s largest importer, drove projections the U.S. will set an export record. The government now estimates soybean supplies as of Aug. 31, 2011–the end of the crop’s marketing year–at 185 million bushels, down 30% from its October estimate. The 200-million-bushel level is generally seen as the dividing line between adequate supplies and short supplies.
Complete story in original format found here.
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