Chicago | Reuters — U.S. corn and soybean futures pushed higher on Wednesday because of uncertainty about the size of the autumn harvests and concerns that prices had dropped too low.
The gains came after the most actively traded corn contract earlier in the session dropped to its lowest price in more than three months and after soybeans fell to their lowest in more than two months.
Question marks surround the upcoming harvests of both crops after historic rains and flooding stalled plantings this spring. The delays left fields more at risk to damage from potential frosts.
“People are starting to realize we’ve taken these things down pretty far pretty fast,” Jim Gerlach, president of broker A/C Trading in Indiana, said about market prices.
“This crop is not in the bin by a long stretch.”
The most-active corn contract on the Chicago Board Of Trade was up 1.5 per cent at $3.71 a bushel (all figures US$). The most-active CBOT soybean contract rose 0.7 per cent to $8.65-3/4 a bushel.
The markets are going to concentrate on the risk of frost for the next six weeks and react to forecasts that reach out into late September and early October, said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.
“The soybean crop size really depends on the fall and the timing of the first damaging frost,” he said.
Soybean traders are also watching developments in the trade war between the U.S. and China, the world’s biggest importer of the oilseed. China slashed purchases from the U.S. after imposing retaliatory tariffs on imports of American soy last year, in response to U.S. duties on Chinese goods.
The U.S. Trade Representative’s office on Wednesday reaffirmed President Donald Trump’s plans to impose an additional five per cent tariff on a list of $300 billion of Chinese imports starting on Sept. 1 and Dec. 15.
Traders are separately waiting for Trump to announce a plan to boost demand for biofuels such as corn-based ethanol.
In the wheat market, prices continued to be weighed down by excess supplies and tough competition in global export markets, analysts said.
The most-active CBOT wheat contract dropped 0.2 per cent to $4.75-1/4 a bushel.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore.