U.S. grains: Corn rallies on weather worries

Chicago | Reuters –– U.S. corn futures rose 1.5 per cent on Tuesday, rallying from early weakness as updated weather forecasts raised the risk of stressful hot and dry conditions in the Midwest crop belt.

Soybean futures were mixed, with favourable crop ratings pressuring deferred contracts. Wheat futures fell, dragged down by the expanding U.S. harvest and ample global supplies.

At the Chicago Board of Trade, July corn settled up 6-1/2 cents at $4.36-1/2 per bushel, after trading as low as $4.23-1/2 (all figures US$).

CBOT July soybeans ended up 1/2 cent at $11.69-1/2 per bushel but the new-crop November contract fell 9-3/4 cents at $11.49-1/4. July wheat settled down 6-1/4 cents at $4.85 a bushel.

Corn climbed on weather jitters amid a hot spell in the Midwest, despite relatively strong crop condition ratings. The U.S. Department of Agriculture late Monday rated 75 per cent of the U.S. corn crop as good to excellent, unchanged from the previous week and above an average of analysts’ expectations for 74 per cent.

However, rain is needed in parts of the eastern Midwest and the Mississippi River Delta.

“Forecasts are a little drier for the six-to-10- and 11-to-15-day outlooks. The warm temperatures over the entire Corn Belt are a concern,” said Dan Cekander, president of DC Analysis.

Soybean futures were mixed, with the nearby July higher on technical buying. But the November contract, which represents the 2016 U.S. harvest and has the largest open interest, was down nearly one per cent.

USDA’s good-to-excellent rating for the U.S. soybean crop was at 74 per cent, up from 72 per cent a week earlier and 67 per cent last year.

Weakness in outside commodity markets added pressure. The 19-market Thomson Reuters CoreCommodity CRB Index was down 0.4 per cent as global equity markets eased amid intensifying worries about a potential British exit from the European Union.

Wheat futures sagged for a fourth straight session on seasonal harvest pressure and record-large global inventories. USDA said the U.S. winter wheat harvest was 11 per cent complete as of Sunday, up from two per cent the previous week.

The CBOT July wheat contract dropped below its 200-day moving average for the first time since June 3.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting fo Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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