SINGAPORE, July 9: U.S. New-crop corn and soybean futures rose for a second consecutive session on Tuesday, underpinned by concern that forecast hot, dry weather in parts of the U.S. Grain belt could stunt crop development.
Wheat extended gains with support from buying by China, which booked more than 1.3 million tonnes of U.S. Wheat in the past week, including its largest single-day purchase since
January 2004.
‘What is driving corn prices is the U.S. Weather as everybody is worried again, remembering last year’s drought that decimated the crop,’ said Ole Houe, an analyst at Sydney-based brokerage IKON Commodities.
‘It is unlikely to happen this year but we certainly have the weather forecast for end of July showing a fair bit hotter and drier than it was last week.’
The Commodity Weather Group (CWG), a private U.S. Weather forecaster, said the southwestern portion of the Midwest should see only limited rain in the next two weeks.
The corn market is focusing on U.S. Midwest as the crop approaches its critical pollination phase, when hot and dry weather can cut yield potential. Much of the crop will be pollinating in the second half of July following planting delays during a cool, wet spring.
Chicago Board of Trade December corn rose almost 1 percent to $5.05-1/4 a bushel by 0258 GMT, after sliding to its lowest since late 2010 last week. November soybeans gained
0.9 percent to $12.63 a bushel, after slipping to its lowest since May 22 in the last session.
U.S. Corn improved in the last week and soybean ratings held steady at a historically high level, but both crops were developing behind schedule, the U.S. Department of Agriculture said in a weekly report on Monday.
The government said 68 percent of the U.S. Corn crop was rated in good to excellent condition, up from 67 percent a week earlier. But only 6 percent of the crop had reached the silking stage, lagging the five-year average of 20 percent after
delays to planting.
For soybeans, the government rated 67 percent of the crop as good to excellent, unchanged from the previous week but the highest rating for early July since 2004. Ten percent of the
crop was blooming, compared with the five-year average of 24 percent.
In the wheat market, there was support from China’s record purchases and estimates of lower output in Russia.
The most-actively traded CBOT September wheat contract added 0.3 percent to $6.65-1/4 a bushel.
The USDA on Monday confirmed private sales of 840,000 tonnes of soft red winter wheat to China for shipment in the 2013-14 marketing year, which began June 1.
It was the third consecutive daily sales announcement of SRW wheat to China, following a 120,000-tonne sale reported on
Friday and a 360,000-tonne sale announced on Wednesday.
Forecasts for Russia’s 2013 wheat crop were cut by two leading agricultural analysts on Monday due to drought in several growing regions and lower-than-expected yields, in the first such downgrades this year.
Prices at 0258 GMT
Contract Last Change Pct chg MA 30 RSI
CBOT wheat 665.25 2.25 +0.34% 866.58 41
CBOT corn 505.25 4.75 +0.95% 758.75 67
CBOT soy 1263.00 10.75 +0.86% 1572.64 87
CBOT rice $14.83 $0.02 +0.14% $15.46 24
WTI crude $102.96 -$0.18 -0.17% $89.41 79
Currencies
Euro/dlr $1.285 $0.056
USD/AUD 0.911 -0.144
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per
Hundredweight RSI 14, exponential
(agencies)
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