CHICAGO, Jan. 14 (Xinhua) -- CBOT agricultural futures rebounded this week as U.S. Department of Agriculture's (USDA) January reports lean bullish, Chicago-based research company AgResource noted.
Yet slowing of the world economy is underway, and the only good news is that China's economy is starting to show signs of recovery, which should help build world demand after the Lunar New Year holiday. AgResource forecast choppiness in the agricultural markets as clear bullish or bearish trends are lacking.
CBOT corn futures recovered this week and are testing the upper end of the recently established range. USDA's 200-million-bushel cut to 2022 U.S. corn production along with ongoing Argentine drought will extend this neutral pattern into the early days of spring, and any lasting bearish trend has been delayed until more is known about Brazilian safrinha production potential in March and April.
The arrival of El Nino in June-July raises the odds that the United States will break the 180-bushel-per-acre yield barrier in 2023. U.S. drought coverage will shrink further over the next two weeks.
U.S. wheat futures ended steady to higher amid bullish U.S. stocks data and rising global markets. Wheat feed use in the September-November period was well above expectations, which forced USDA to lift its annual forecast by 30 million bushels, which in turn keeps 2022-2023 U.S. wheat stocks below 575 million bushels. AgResource maintains that strong chart-based support at 7.30-7.40 dollars for wheat stays intact until more is known about Northern Hemisphere crop health this spring.
Yet the trigger that is needed to spark a lasting short-covering rally is absent. What is most important is that there is no indication of any disruption to Black Sea grain flows nearby. This keeps export demand deflated in the United States and Europe. AgResource advises old crop sales above 8.00 dollars.
Soybean futures ended the week higher. Support came from concerns about the Argentine drought. Additional support came from USDA reports that were viewed as bullish. December 1 soybean stocks were reported at 3,022 million bushels, down 114 million bushels from last year and 123 million bushels under the average trade estimate. USDA lowered soybean yield by 0.7 bushels per acre and reduced acreage by 300,000 acres, resulting in the largest decline in January production on record. USDA also lowered export forecast by 55 million bushels. ■