GRAINS-Corn rebounds on U.S. crop rating; favourable weather caps gains
Chicago corn futures gained almost 1% on Tuesday, rebounding from a four-month low hit in the previous session after a U.S. government report showed a decline in crop condition across the country’s key-growing areas. Wheat rose for a second session to its highest since late August on worries over production in southern hemisphere, while soybeans edged higher.
The most-active corn contract on the Chicago Board Of Trade was up 0.9% at $3.57-1/2 a bushel, as of 0348 GMT. In the previous session, it hit $3.52-1/4 a bushel, its lowest since May 13. Wheat added 0.5% to $4.76-3/4 a bushel, having closed 2.3% higher on Monday and soybeans gained 0.2% at $8.59-3/4 a bushel.
“It is a weather-driven market, the USDA’s weekly crop report is supporting prices. Coming weeks are crucial ahead of the harvest,” a Singapore-based grains trader said. The U.S. Department of Agriculture said 55% of the U.S. corn crop was in good-to-excellent shape, as of Sunday, down 3 points from a week earlier, and below market forecasts. The agency said 55% of the soybean crop was in good-to-excellent condition, matching analysts’ forecasts.
The U.S. Crop Watch producers have reported slower-than-normal development in their corn and soybeans all season because of late planting and cooler temperatures, but the warmer weather for the next two weeks is exactly what the crops need to help push them toward the finish line, Karen Braun, a market analyst for Reuters wrote in a column. The mid-May planted soybeans have started to make the turn toward maturity, but the later-planted ones have not, which implies there is still time for rains to make a difference for the filling of pods.
The wheat market is being underpinned by expectations of lower production in Australia and Argentina. Australia on Tuesday trimmed its wheat production forecast during the 2019/20 season by nearly 10% as prolonged dry weather across the country’s east coast wilts production.
The Australian Bureau of Agricultural and Resource Economics and Sciences pegged production at 19.2 million tonnes, down from its previous estimate in June of 21.9 million tonnes. Argentina’s wheat crop could be damaged by dryness in the western part of the country’s farm belt if rains do not appear over the weeks ahead in time for key development stages, local climate specialists said on Monday. Commodity funds were net sellers of CBOT corn, soybean and soyoil futures contracts on Monday and net buyers of wheat, traders said. Funds were about net even in soymeal, traders said.
Grains prices at 0348 GMT Contract Last Change Pct chg Two-day chg MA 30 RSI CBOT wheat 476.75 2.25 +0.47% +2.25% 480.72 52 CBOT corn 357.50 3.25 +0.92% -0.35% 384.28 30 CBOT soy 859.75 2.00 +0.23% -0.20% 872.49 39 CBOT rice 11.94 -$0.02 -0.13% -0.25% $11.77 68 WTI crude 58.13 $0.28 +0.48% +2.85% $55.41 Currencies Euro/dlr $1.104 $0.002 +0.15% +0.09% USD/AUD 0.6854 0.001 +0.12% +0.60% Most active contracts Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential
Source: Reuters (Reporting by Naveen Thukral, Editing by Sherry Jacob-Phillips)