Chicago | Reuters – U.S. corn futures closed fractionally higher on Thursday but held just above one-month lows, as benign crop weather and expectations of a large harvest offset news of massive U.S. corn sales to China, analysts said.
Soybean futures ended firmer higher while wheat futures drifted lower.
Chicago Board of Trade December corn settled up 1/2 cent at $3.26-3/4 per bushel after matching Wednesday’s one-month low of $3.26.
Benchmark November soybeans ended up 3 cents at $8.88-1/4 a bushel while CBOT September wheat finished down 3-1/4 cents at $5.29-1/2 a bushel.
Corn futures hit a session high of $3.29-1/2 after the U.S. Department of Agriculture confirmed sales of 1.937 million tonnes of corn to China, the Asian country’s largest single-day purchase of the U.S. feed grain.
But the market pared gains as traders returned their focus to favorable weather that has stoked expectations for a huge U.S. crop. The USDA, which is scheduled to release updated monthly crop production forecasts on Aug. 12, currently projects the average national corn yield at 178.5 bushels per acre, a record high if realized.
Analysts are considering the possibility of a yield above 180 bushels per acre.
“If I had to guess, we are going to see a noticeable hike in (corn) yield, and it will more than offset any demand increase that the USDA puts out,” said Tom Fritz, a partner at EFG Group in Chicago, referring to the USDA’s Aug. 12 report.
Good weather in most of the Midwest also capped rallies in soybean futures, despite better-than-expected weekly export sales data. The USDA reported soybean export sales in the week ended July 23 at more than 3.6 million tonnes, above a range of trade expectations.
Looking ahead, traders are expecting big crops in Brazil, where farmers will start planting soybeans in September. Brazil’s soy 2020-21 harvest is expected to top 130 million tonnes, according to a Reuters analyst poll.
– Additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore