June 20, 2013
Soybeans recover to close higher after Fed decision
US soybean futures edged higher on Thursday, shaking off early losses tied to profit-taking, after the Federal Reserve announced an aggressive new economic stimulus program.
Soybeans added to Wednesday's gains, when the market notched its biggest one-day rally in almost two weeks after the US Department of Agriculture issued a tighter-than-expected supply outlook.
At Thursday's close soybeans were down almost 3 percent form the record high set last week.
The Fed's move also supported corn and wheat futures, which traded higher throughout the day. Corn futures were recovering from a two-month low set on Wednesday after USDA reported a larger-than-expected harvest forecast.
US stocks added to gains on the Fed's move, while the dollar fell broadly, oil prices rose and gold hit a six-month high.
"I certainly think the Fed decision and the rising stock market helped the grains out," said Brian Hoops, president of Midwest Market Solutions.
Chicago Board of Trade new-crop November soy closed up 0.1 percent to $17.47-1/4 a bushel. December wheat rose 1.4 percent to $9.02 a bushel, and December corn was 0.6 percent higher at $7.73-3/4 a bushel.
The closely watched USDA crop report on Wednesday gave an updated view on how the worst drought in the United States in more than half a century hurt Midwest crops.
USDA estimated this year's U.S. soybean harvest at 2.634 billion bushels, down from last month's estimate of 2.692 billion and below analysts' average estimate of 2.657 billion.
Ending soybean stocks next summer were forecast to be the lowest in nine years at 115 million bushels, unchanged from the August estimate.
The US corn harvest was forecast at 10.727 billion bushels, down slightly from last month's estimate of 10.779 billion but above analysts' average estimate of 10.38 billion.
It would be the smallest corn crop in six years, and the lowest yield in 17 years at 122.8 bushels per acre. Hoops predicted corn and soybean futures would extend gainson Friday due to supply fears.