All commodities fall ahead of November USDA report: Agritel
All commodities declined in Chicago on Friday, November 5, as traders took profits ahead of tomorrow's USDA report, the Agritel consultancy writes. The yield estimates for corn and soybeans are expected to be raised from last month.
As reported, corn export sales have been disappointing so far, with a lower activity to China than expected. Planting conditions in South America remain favourable. The record ethanol production is still a supportive factor for corn.
"Another positive element for the corn is the firmness of fertilizer prices, which could encourage growers to switch to less nitrogen-intensive crops. The USDA on Friday estimated US corn acreage for next year at 92.0 mln acres (37.2 mln ha) vs. 93.3 mln (37.7 mln ha) this year and 87.5 mln acres (35.4 mln ha) of soybeans vs. 87.2 mln (35.3 mln ha) this year," analysts comment.
In wheat, the market is supported by a disappointing winter wheat crop rating. The water deficit in the Black Sea region, penalizing winter grain plantings, must be considered as well, Agritel analysts mark. It could limit the potential downward movement of prices.
"The water deficit continues in the Black Sea basin, particularly in Ukraine. This is affecting about 1/3 of the area and reducing the sowing estimates for winter cereals. On Friday, wheat prices were slightly higher in Ukraine, while those in Russia were a bit lower. In Ukraine, corn prices were down as work progressed. The harvest was estimated to be 73% complete by the 1st of November," the report reads.
Previously reported that a prolonged drought put at risk the development of winter crops in Ukraine and Russia.
As of 5 November, the new crop campaign in Ukraine was 87% completed.
