Chicago | Reuters — U.S. spot corn futures hit their highest level in nearly a year before paring gains on Thursday and Minneapolis spring wheat neared a two-year top on worries about hot and dry weather stressing crops in the northern Plains and Midwest, analysts said.
Soybean futures also firmed.
Chicago Board of Trade July corn futures settled up one cent at $3.85-3/4 per bushel after reaching $3.91-3/4, the highest spot price on a continuous chart since June 28, 2016 (all figures US$).
CBOT July wheat ended up 4-1/2 cents at $4.49-1/4 per bushel after reaching $4.55-3/4. MGEX July spring wheat finished up 8-3/4 cents at $6.04-1/4 after touching $6.17-3/4, a contract high and the highest spot price since July 2015.
CBOT July soybeans ended up 7-1/4 cents at $9.38 a bushel.
Weather was the focus, with a hot weekend expected in the central U.S. early in the growing season for corn, soybeans and spring wheat. Commodity funds held a large net short position in all three commodities as of May 30, leaving the markets vulnerable to a short-covering rally.
“This is our first weather scare of the season, and the market was just too short going in. So we’ve got them on the run,” said Tom Fritz, a partner with EFG Group in Chicago.
Trading volume in CBOT corn futures on Wednesday hit an all-time high of 1.09 million contracts, reflecting index funds rolling positions forward as well as active farmer selling as prices hit multi-month highs, analysts said.
“I think we saw a tremendous amount of cash movement yesterday, old-crop and new-crop,” Fritz said.
Forecasts called for temperatures in the central Midwest and northern Plains to reach the mid-90s F (34-36 C) Sunday through Tuesday, and parts of South Dakota could reach 100 F (38 C), said Joel Widenor, an agricultural meteorologist with the Commodity Weather Group.
Rains should bring relief to parts of North Dakota, the top spring wheat state, by early next week, but may miss South Dakota. And a lack of rain over the next two weeks would leave about 25 per cent of the Corn Belt at risk of stress, Widenor said.
Soybean prices drew support from hefty imports in China, the largest buyer of the oilseed. Imports rose in May by 25 per cent from a year earlier to the highest on record as a backlog of previously purchased supplies arrived in the country.
— Julie Ingwersen is a commodities correspondent for Reuters in Chicago. Additional reporting for Reuters by Sybille de La Hamaide in Paris and Naveen Thukral in Singapore.