Chicago | Reuters — U.S. corn and soybean futures firmed on Wednesday, stabilizing near recent highs on persistent concerns about dry weather in Argentina hurting crops as they pass through key stages of development, traders said.
Corn’s gains were limited as the rally stalled out at the six-month high hit on Tuesday. Soybeans rose to their highest since July 28.
“You are going to have a hard time keeping the grains down,” said Jim Gerlach, president of A/C Trading. “These forecasts for rain keep dissipating as they get closer and they disappoint.”
Soymeal futures also rose as the South American forecast stoked fears that Argentina, the world’s largest shipper of soymeal, will have to crush imported soybeans to meet their export commitments. Soymeal futures have risen for seven days in a row, gaining 13.1 per cent during the streak.
But wheat futures weakened, with concerns about plentiful global supplies sparking a round of profit taking despite dry conditions in key growing areas of the U.S. Plains. Wheat’s run-up to the six-month highs hit on Tuesday has been fuelled partly by ongoing concerns about the health of the dormant crop.
“It is dry in the United States and that does pose a threat to production but it looks like the market is unwinding some positions that were developed in recent days on this threat,” said Phin Ziebell, an agribusiness economist for National Australia Bank.
Chicago Board of Trade March soft red winter wheat futures settled down five cents at $4.55-3/4 a bushel (all figures US$).
Dealers noted there continued to be stiff competition in the global market, a view reinforced by news that FranceAgriMer had lowered its forecast of French soft wheat exports outside the EU in 2017-18 for the fourth month in a row.
The agency has previously attributed the diminished outlook to competition from the Black Sea region.
CBOT March soybean futures were 5-1/2 cents higher at $10.17-1/4 a bushel and CBOT March corn was up 1/2 cent at $3.67-1/4 a bushel.
“Argentine weather remains a fundamental concern. Weather forecasters expect some rain over the coming week but it may be too little too late for some Argentine crops,” Commonwealth Bank of Australia analyst Tobin Gorey said.
Both corn and soybeans rebounded from weakness during the overnight trading session.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago; additional reporting by Colin Packham in Sydney and Nigel Hunt in London.