Chicago | Reuters — Chicago corn futures closed higher for the first time in five sessions on Tuesday on technical buying and lower-than-expected condition ratings for developing U.S. crops, analysts said.
Following widespread U.S. planting delays this spring, traders have shifted their attention to production prospects for crops that got seeded.
Periodic light rains expected this week should benefit those crops.
“The rain is much needed now,” said Don Roose, president of U.S. Commodities.
Chicago Board of Trade September corn futures settled up 3-1/2 cents at $4.19 a bushel, rallying after dipping to $4.13-1/4 earlier in the session, its lowest since May 24 (all figures US$).
Corn prices tumbled on Friday when the U.S. Department of Agriculture (USDA) pegged the U.S. planted area well above market expectations but the market’s focus is now shifting away from acres planted.
“Our attention is now focused on what the weather is going to be for the next couple weeks,” Roose said.
Roose said the amount of rain, jet stream direction, and pressure systems are key things to watch for in the coming weeks as crops approach their key reproductive phase.
USDA in its weekly crop progress report late Monday left its rating for corn conditions unchanged from the prior week at 56 per cent. Analysts polled by Reuters had expected a slight improvement.
A year ago, 76 per cent of the corn crop was rated good/excellent.
CBOT August soybeans settled down 10 cents to $8.79-3/4 a bushel, a second straight lower close, as ample supplies of the oilseed anchored the market.
“There is more of a cushion with soybeans,” said Roose. “There will be more of a surplus to fall back on.”
USDA left its crop condition rating for soybeans at 54 per cent good-to-excellent, unchanged from the previous week but well down from 71 per cent a year ago.
Soybeans cast off support from Friday’s lower-than-expected USDA acreage estimate and news of a trade truce between Washington and Beijing.
Futures fell on concerns that Chinese demand for imported soy would waver due to hog herd losses caused by African swine fever, said Joe Vaclavik with Standard Grain.
CBOT September wheat settled down 8-1/2 cents at $5.03-1/4 a bushel after touching a three-week low at $5.01-1/4 as favourable harvest weather in the U.S. Plains weighed on the market.
USDA said Monday that 30 per cent of the crop was gathered, in line with trade expectations.
Egypt’s state grain buyer purchased 60,000 tonnes of Romanian wheat at an international purchasing tender. No U.S. wheat was offered.
Algeria’s state grains agency issued a tender to purchase milling wheat for shipment in August, European traders said.
— Reporting for Reuters by Barbara Smith; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.