Chicago | Reuters — U.S. corn and soybean futures touched one-week highs on Thursday as traders worried about the risk of frost damage to this year’s late planted U.S. crops, analysts said.
Traders were also covering short positions after recent declines and ahead of the three-day Labour Day weekend.
They remain nervous about the potential for unfavourable weather to hurt developing corn and soybeans, after historic rains and flooding stalled plantings in the spring. The delays made the crops more vulnerable to damage from frost.
“With the late maturity that’s out there on soybeans, that’s going to be a concern in the back of the trade’s mind for awhile,” said Matt Wiegand, commodity broker for FuturesOne.
The most-active corn contract on the Chicago Board of Trade (CBOT) ended nearly flat at $3.71-1/4 a bushel, after paring gains (all figures US$). Soybeans closed up 0.3 per cent at $8.68-1/2 a bushel.
The corn market dropped to its lowest in more than three months on Wednesday as the U.S. crop has been progressing well after the spring floods.
Mild, mostly dry weather is now favoring crop development, agricultural meteorologists said.
“While conditions are mostly benign across the Corn Belt, the crops need an extended period of favorable weather to finish this year,” said Karl Setzer, commodity market risk analyst for AgriVisor. “This includes a frost date well into late October, which not all forecasters believe is possible.”
Grain traders are awaiting details about a “giant package” related to ethanol that U.S. President Donald Trump said his administration is planning to announce. Farmers are angry that oil refiners have been freed from obligations to use the corn-based fuel.
Traders are also watching the U.S.-China trade war. China, the world’s biggest soybean importer, slashed purchases from the United States after imposing retaliatory tariffs on imports of U.S. soy last year. The countries are discussing the next round of face-to-face trade talks scheduled in September.
The U.S. Department of Agriculture said U.S. soybean export sales in the week to Aug. 22 totaled 448,300 tonnes and corn sales were 856,300 tonnes, both in line with analysts’ expectations.
U.S. wheat sales were 661,700 tonnes, near the high end of expectations.
But U.S. wheat exporters face stiff competition for business on the global market, where supplies are abundant, traders said.
The International Grains Council increased its forecast for 2019-20 world wheat production by one million tonnes, to 764 million tonnes.
Most-active CBOT wheat slipped 0.5 per cent, to $4.72-3/4 a bushel.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Naveen Thukral in Singapore.