Chicago | Reuters – Chicago corn futures rose off a three-week low on Wednesday, as the prospect of further hot weather in the U.S. Midwest affecting yields this fall, while soybeans were boosted by hopes that trade talks between the United States and China could be revived.
The most-active corn contract on the Chicago Board of Trade was up 0.23 per cent at $4.32-1/2 a bushel by 11:00 a.m. CDT (1500 GMT), having climbed 1.1 per cent in the previous session.
Very hot and dry weather could return to the U.S. Midwest in the next two weeks, particularly in parts of top-corn producing states Illinois, Iowa and Indiana, according to a report by Commodity Weather Group on Wednesday.
That, in turn, added support to corn prices and prompted some short covering, traders said.
Meanwhile, soybean futures continued to see a bullish bump from fund buying, driven largely by news late Monday that the on-again, off-again U.S.-China trade talks are resuming. The most-active soybean contract on CBOT was up 0.66 per cent at $9.09-3/4 a bushel.
Top U.S. and Chinese negotiators will meet face-to-face next week for the first time since the countries’ leaders agreed in June to revive talks aimed at ending a year-long trade war between the world’s two largest economies.
“The trade is optimistic that we will see at least some business from this,” Karl Setzer, a commodity market risk analyst for AgriVisor, wrote in a market note on Wednesday.
How quickly that business could show up is unclear. The U.S. Department of Agriculture on Wednesday reported export sales cancellations of 100,000 tonnes of old-crop U.S. soybeans by undisclosed buyers.
Chinese soybean crushers are unlikely to buy in bulk from the United States any time soon as they grapple with poor margins and longer-term doubts about Sino-U.S. trade relations, people familiar with the matter said.
Wheat futures also were higher on technical buying and spillover strength from higher corn and soybeans, traders said.
A diminished outlook for production in top wheat exporter Russia was also supportive. SovEcon said it had lowered its forecast for this year’s Russian wheat crop to 73.7 million tonnes from an earlier estimate of 76.6 million.
The forecast is slightly below the U.S. Department of Agriculture’s current projection of 74.2 million tonnes.
The most active CBOT wheat contract rose 1.49 per cent to $4.94-1/2 a bushel, as the market found support after dipping to a low of $4.83-1/4 on Tuesday, its weakest since May 30.
– Additional reporting by Naveen Thukral in Singapore, and Nigel Hunt in London