Chicago | Reuters — Unfavourable dryness in crop-growing areas of South America on Tuesday pushed Chicago Board of Trade corn futures to their highest price since July and soybeans to an August high, analysts said.
Wheat futures also rallied.
South American weather was in the spotlight amid concerns about dry weather in southern Brazil, the world’s top soybean exporter. Losses in production could shift global export business to the United States.
“The time for concern about the South American crop is upon us and will become a bigger factor as we move into the new year,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.
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CBOT March corn ended up 7-1/4 cents at $5.98-1/4 per bushel and touched the highest for a nearby contract since July 14 at $5.99 (all figures US$).
CBOT January soybeans closed 15-3/4 cents stronger at $13.08 per bushel and reached the highest price for a front-month contract since Aug. 30.
CBOT wheat ended up 21-1/4 cents at $7.99 a bushel and set the highest price for a nearby contract since Dec. 8.
About one-third of corn and soybeans are facing crop stress in southern Brazil, while less than 10 per cent of the crops in Argentina are under stress, Commodity Weather Group said.
Little moisture is expected in southern Brazil or Argentina for the next 10 days, said Joel Karlin, a market analyst for Western Milling.
“Arid conditions will persist with heat building,” he said.
A rebound in crude oil prices helped support gains in agricultural markets as investors’ appetite for risk improved, traders said. Corn is linked to oil because the grain is used to make ethanol.
“Corn and soybeans remain supported by strong margins for ethanol production and for processing soybeans, along with limited farmer selling,” Karlin said.
In demand news, Turkey’s state grain board purchased 320,000 tonnes of milling wheat in an international tender, traders said.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Michael Hogan in Hamburg and Emily Chow in Beijing.
