U.S. grains: Corn sets 10-month high on export demand

(Dave Clark photo courtesy ARS/USDA)

Chicago | Reuters — Chicago Board of Trade corn futures rose about one per cent on Friday to the highest level in 10 months on strong export demand and short-covering ahead of a long U.S. holiday weekend, traders said.

Soybean futures also climbed even as nearby soymeal futures declined. Wheat futures closed little changed after matching last week’s high.

At the CBOT, July corn settled up 4-1/2 cents at $4.12-3/4 per bushel (all figures US$). July soybeans ended up 6-3/4 cents at $10.86-1/2 a bushel and July wheat settled up 1/4 cent at $4.81-1/2 a bushel.

Corn advanced as traders squared positions ahead of the long weekend. U.S. markets including the CBOT will be closed on Monday for the U.S. Memorial Day holiday.

Analysts also cited robust export sales, with the U.S. Department of Agriculture confirming that private exporters sold 130,000 tonnes of U.S. corn to unknown destinations in the last day. USDA has confirmed sales of 383,000 tonnes of U.S. corn in the last two days.

“Corn is still very competitive in the world market, until we get supplies out of South America. I think that’s a driving force,” said Don Roose, president of U.S. Commodities.

Soybeans rose, but the spot contract stayed below a 20-month high set a day earlier. Strength in soybeans was muted by a decline in front-month soymeal futures, which fell on profit-taking after soaring above $400 per short ton this week and setting its own 20-month top at $419.80 on Thursday.

Argentina’s soy-producing regions were drenched by heavy rains in April, just ahead of the harvest, raising questions about the size and quality of the crop.

“The Buenos Aires Grain Exchange has this week maintained its 56 million tonnes forecast, but plenty of market chatter is still circulating about additional cuts to Argentine output,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

“We think the beans rally might have more in it yet,” Gorey said.

Uncertainty about U.S. summer crop weather lent support, with some analysts noting prospects for a La Nina weather phenomenon that could bring hot and dry conditions to the Midwest.

“A big concern is that we could get into a dry/drought pattern as we move into the last half of the growing season, more so on soybeans than corn,” said Roose.

CBOT wheat ended mixed, with the July contract up 1/4 cent. The market remained weighed down by ample supplies and a generally favourable global crop outlook, with winter wheat harvest approaching in the Northern Hemisphere.

For the week, soybean futures recorded a seventh consecutive week of gains, the longest such rally for a spot contract since 2007. Corn and wheat each posted a third straight weekly advance.

Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Nigel Hunt in London and Naveen Thukral in Singapore.

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