Chicago agricultural commodities rise on downbeat crop report

Chicago Board of Trade (CBOT) grains futures rose on Friday, with corn futures headed for the biggest gain in two weeks after a U.S. government report showed stockpiles trailed analyst estimates.

The most active corn contract for December delivery added 7.5 cents, or 2.28 percent, to 3.3675 dollars per bushel. December wheat delivery rose 3 cents, or 0.75 percent, to 4.02 dollars per bushel. November soybeans rose 3.75 cents, or 0.39 percent, to 9.54 dollars per bushel.

Prices rose after the U.S. Department of Agriculture (USDA), in a quarterly crop report, said 1.738 billion bushels of corn were in storage as of Sept. 1.

That was fewer than analysts on average had expected, indicating that livestock producers had fed more corn to their animals than anticipated, said Brian Hoops, president of brokerage Midwest Market Solutions.

End-of-quarter short covering was noted as helping the rally, after the USDA issued its data, ED&F Man Capital Markets analyst Charlie Sernatinger said in a note to clients.

The agency further fueled ideas that livestock producers had stuck with corn as feed, instead of switching to wheat, by reporting that 2.527 billion bushels of wheat were in storage at the start of the month. That topped analysts' expectations.

U.S. corn and soybean exporters have seen increased demand after adverse weather hampered crops in South America. Low prices for the grain may also be enticing livestock producers to increase use of the commodity in feed for animals.

Jack Scoville, The PRICE Futures Group's senior market analyst, said that the report is a little bullish for beans and corn as the stocks came in on the low side of expectations.

"For the wheat market, it's kind of a mixed bag with production a little less than expected but the stocks a little higher than expected," Scoville said.

Source:  XINHUA