Chicago | Reuters — U.S. soybean futures rallied on Tuesday on eroding Midwest crop conditions and improving export demand, and as soyoil prices rose another three per cent amid further gains in crude oil markets.
Corn futures also climbed on deteriorating crop conditions across the heart of the farm belt. Wheat ended lower, though spillover support from rising corn and soy limited the losses.
Soybeans posted their strongest percentage gains in nearly two months on Tuesday after the U.S. Department of Agriculture (USDA) reported a weekly decline in crop conditions and as severely hot weather was forecast for the heart of the Midwest crop belt.
Demand for soy, meanwhile, was also improving. USDA confirmed a private sale of U.S. soybeans to China in its first daily sales announcement since reporting a string of purchases by the top importer earlier this month.
“We’re starting to sell beans to China again, so all of a sudden our demand profile is picking up a bit,” said Jack Scoville, analyst with the Price Group.
“The crop condition ratings yesterday showed a deterioration and ideas are that, with the weather developing how it is, we could see more,” he said.
Corn crop conditions dropped by more than expected in the past week, particularly in the eastern Midwest. The steepest drop was in Illinois, where the heat index was expected to climb above 100 F (37.8 C) on Tuesday and Wednesday.
Chicago Board of Trade November soybeans jumped 39 cents to $13.31-3/4 a bushel, the contract’s strongest percentage gain since June 30 (all figures US$).
December corn rose 9-3/4 cents to $5.45-1/4 a bushel, while CBOT December wheat fell 1-1/4 cents to $7.32-1/4 a bushel.
— Reporting for Reuters by Karl Plume in Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.