Chicago | Reuters — U.S. soybean futures rose on Thursday on worries about dryness building in the Midwest crop belt, while a setback in the dollar and speculative buying at the start of a new month lent additional support, analysts said.
Chicago Board of Trade (CBOT) wheat climbed 2.8 per cent, extending Wednesday’s rebound from a 2-1/2 year low.
Corn futures were mixed, with inter-market spreading and worries about demand pressuring front-month July while deferred contracts ended higher on U.S. weather woes.
Passage of the U.S. debt ceiling bill in the House of Representatives lent support to grains as well as crude oil futures and Wall Street equity markets.
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CBOT July soybeans settled up 29-3/4 cents at $13.29-1/2 per bushel, and July wheat ended up 16-1/2 cents at $6.10-3/4 (all figures US$).
CBOT July corn finished down 1-1/2 cents at $5.95-1/2 a bushel while December corn, representing the 2023 crop, ended up 8-1/4 cents at $5.30.
Soybeans and new-crop corn futures climbed on fears of drought crimping U.S. production prospects. The weekly U.S. Drought Monitor, prepared by a consortium of climatologists, showed that 66 per cent of the Midwest was abnormally dry by May 30, up from 27 per cent the prior week.
In addition, the U.S. Climate Prediction Center’s latest monthly drought outlook, released on Wednesday, showed that drought was likely to develop in June across Iowa and most of Illinois, the top two U.S. corn and soybean states, as well as in Indiana, Ohio and Pennsylvania.
“For the moment, the trade is focusing on weather and supply, rather than demand,” said Ted Seifried, chief market strategist for the Zaner Group. “If we get a forecast that has much more rain in it, then this (rally) will end.”
Wheat drew support from news of excess rain in China’s wheat belt. The top wheat-growing province of Henan is expected to be hit by more rain in coming days, state forecasters said, complicating efforts to harvest grain already damaged by wet weather in late May. China is the world’s largest wheat grower and also a major importer.
Traders also noted worries about the Black Sea grain export pact between Russia and Ukraine. A Ukraine official said the United Nations-brokered deal had been halted again because Russia had blocked registration of ships to all Ukrainian ports, and a spokesman said the U.N. is concerned about slow implementation of the deal.
— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
