Chicago | Reuters — Chicago corn futures gained on Tuesday, following energy markets higher on hopes of renewed ethanol fuel demand as lockdowns ease, but were capped by ahead-of-schedule planting across the U.S. Midwest, analysts said.
Soybeans climbed on confirmation of new sales to China, even as the United States renewed tariff threats over China’s handling of the COVID-19 coronavirus. Gains were also tempered by strong planting progress.
Wheat ended higher, despite strong marks from the U.S. Department of Agriculture’s (USDA) crop conditions and progress report, while an assessment of the Oklahoma winter wheat crop by Oklahoma State University Extension and private crop consultants estimated harvest down more than 13 million bushels.
Chicago Board of Trade’s most-active July corn contract ended up 1-1/2 cents at $3.17 a bushel (all figures US$).
CBOT July wheat gained 1-1/4 cents, ending at $5.20-3/4 a bushel. July soybeans added three cents to close at $8.39-1/2 a bushel.
Corn was supported by stronger oil, as expectations of increased fuel demand as countries start to ease coronavirus lockdowns could lead to greater consumption of corn-based ethanol fuel.
“Grains are following energy higher today,” said Don Roose, president of Iowa-based U.S. Commodities. “It’s giving us some relief today.”
USDA said Tuesday that Chinese buyers booked deals for 378,000 tonnes of U.S. soybeans. Private exporters reported that 136,000 tonnes were for delivery in the 2019-20 marketing year, with 242,000 tonnes for 2020-21.
Roose said 2019-20 delivery means U.S. soybeans may be becoming more competitive in price against top exporter Brazil.
“It says we’re probably down to levels that we can compete, at least off the Pacific northwest,” said Roose.
Gains were capped by concern that renewed political tensions between Washington and Beijing over the coronavirus pandemic could hinder new purchases of U.S. farm products by China.
Strong planting progress in both corn and soybeans stifled the gains, after USDA reported that U.S. farmers had planted 51 per cent of intended corn acres as of Sunday, above analyst estimates of 48 per cent and the five-year average of 39 per cent.
“We’ve got a great pace of planting. Some folks want to talk about a brief spell of cold temps at the end of the week, but I don’t want to hang my hat on that,” said Tom Fritz, commodity broker at EFG Group.
USDA said 23 per cent of soybean acres were planted, up from just eight per cent a week ago and over the five-year average of 11 per cent.
— Reporting for Reuters by Christopher Walljasper; additional reporting by Michael Hogan in Hamburg and Naveen Thukral.