Chicago | Reuters — U.S. corn futures rose about one per cent on Friday as wet weather forecast for the Midwest crop belt prompted short-covering, analysts said, while soybeans fell to multi-month lows.
Wheat futures firmed slightly but still recorded a weekly decline as ample global supplies anchored the market.
Chicago Board of Trade July corn settled up four cents at $3.61-1/4 a bushel, rebounding after setting a contract low this week (all figures US$).
CBOT July soybeans ended down 5-3/4 cents at $8.67 after dipping to $8.66, a seven-month low, while July wheat finished up 1 cent at $4.42-1/2.
Corn futures rose as traders mulled outlooks for rain and even snow that could further delay planting in the heart of the U.S. Midwest. Farmers faced with significant delays could be encouraged to switch some acres intended for corn to soybeans, which can be planted later.
“A series of storm systems over the next week will bring more wet weather to the central U.S. … Snow is expected this weekend across portions of the northern Midwest and the northern Plains, which will also prevent corn and soybean planting,” space technology company Maxar said in a daily weather note.
Corn futures fell hard earlier this week as commodity funds added to a record-large net short position in CBOT corn futures, betting on further price declines given plentiful global grain supplies. But the big net short position left the market vulnerable to short-covering rallies.
“At some point these guys have to start getting serious about planting delays, especially with the funds short almost 400,000 contracts,” said Jim Gerlach, president of Indiana-based broker A/C Trading.
Soybean futures fell on prospects for increased U.S. acreage, as well as questions about demand from top buyer China, which is locked in a trade row with the United States, and the spread of African swine fever in China’s hog herd. Soy is a key feedstuff for hogs.
“Soybean prices are weaker… on the growing realization that a China trade agreement likely will not ‘fix’ its balance sheet in the face of African swine fever,” INTL FCStone chief commodities economist Arlan Suderman said in a client note.
Meanwhile, Brazil’s 2018/19 soybean crop is poised to be the second largest on record, a Reuters poll showed. According to the average of 12 forecasts, farmers will collect 115.46 million tonnes of the oilseed this season, below only last year’s record output of 119.3 million tonnes.
Wheat futures have also been pressured by ample world supply, underscored by favourable growing conditions for U.S. and Russian wheat.
The International Grains Council on Thursday nudged up its forecasts for world wheat production in the 2019-20 season, largely reflecting an improved outlook for Russia’s crop.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.