Chicago / Reuters – U.S. corn futures firmed on Monday as forecasts for scorching heat this week in the Midwest, where the crop is pollinating, fuelled concerns about yield prospects, traders said.
Soybeans turned higher as updated midday forecasts called for more hot and drier conditions next week, a change from previous outlooks that had predicted a break in the heat.
Wheat followed corn and soy higher. At the Chicago Board of Trade, most-active December corn settled up 5 cents at $3.63-1/4 per bushel. November soybeans ended up 9 cents at $10.66-1/4 a bushel and September wheat settled up 4-3/4 cents at $4.29-1/2.
Weather in the U.S. Midwest remained the focus. Forecasts called for temperatures to reach the mid- to upper 90s Fahrenheit this week, with readings possibly topping 100 degrees F (38 C) from Missouri to South Dakota.
“The drier weather late this week will be accompanied by very hot weather, with temperatures still expected to reach much above normal levels across the Corn Belt,” MDA Weather Services said in a note to clients.
Corn and soybean crops are in good shape so far. Rains crossed the Midwest over the weekend, recharging soil moisture, and condition ratings for both the corn and soy crops are historically high.
After the CBOT close, the U.S. Department of Agriculture rated 76 per cent of the corn crop as good to excellent, unchanged from a week earlier. Analysts surveyed by Reuters ahead of the report had expected a slight decline.
For soybeans, the USDA rated 71 per cent of the crop as good to excellent, unchanged from the previous week and in line with trade expectations.
CBOT corn drew additional strength after weekly data from the U.S. Commodity Futures Trading Commission on Friday showed that non-commercial traders slashed their net long position in CBOT corn by about 93,000 contracts, to a net 14,216 lots in the week to July 12.
“The shift in corn was greater than anticipated by many in the market, providing a bit of short-covering support,” Arlan Suderman, chief commodities economist for INTL FCStone, said in a note on Monday.
Funds still hold a large net long position in CBOT soybean futures, leaving that market vulnerable to long liquidation. Wheat followed the firm trend, but ample supplies anchored prices.
Record-high yields are helping farmers to harvest a bumper crop of hard red winter wheat, the most common U.S. variety, but prices have tumbled as the world is awash with supply.