USDA data lead to soaring grain and soybean prices

The figures published by the US Department of Agriculture (USDA) yesterday evening gave a renewed boost to the rally enjoyed by grains and oilseeds. US stocks of corn and soybeans as per 1 June were reported as being significantly lower than observers had anticipated, notes Commerzbank. 

Admittedly, stocks are noticeably higher than last year following the record US crops of 2014, yet unexpectedly strong demand has limited the increase in stock levels. The USDA's acreage report now shows a more pronounced shift from corn- to soybean-growing. 

At the end of March, the USDA had forecast a surprisingly minor shift on the basis of surveys among farmers. That said, the estimate is only provisional as the wet weather has severely delayed the planting of soybeans, and indeed of cotton. Although the reported wheat acreage and stocks were both higher than expected, the wheat price also gained by a further 5.5%, says Commerzbank. This means that wheat on the CBOT has soared by almost 18% within just four days of trading - its sharpest price rise in such a short space of time in nearly five years. This is due to short covering and concerns about crop outages and reduced quality due to rain in the US and dry conditions in the EU and Canada.