U.S. grains: Midwest forecast supports gains in soy, corn

CBOT wheat up, MGEX wheat down

CBOT July 2021 soybeans (candlesticks) with 20-day moving average (dark green line) and ICE July 2021 canola (yellow line). (Barchart)

Chicago | Reuters — U.S. corn and soybean futures rose on Tuesday after a government report showed that the condition of crops was worse than expected as a heat wave hit the U.S. Midwest.

“Yesterday’s Crop Progress report provided plenty of fodder for the bulls,” Matt Zeller, director of market information at StoneX, said in a note to clients. “No change yet in hot and dry weather forecasts going forward.”

U.S. wheat futures were mixed, with winter wheat contracts rising on technical buying while spring wheat eased for a second day in a row after some rains in Canada.

Chicago Board of Trade July soybean futures settled up 19-3/4 cents at $15.80 a bushel and CBOT July corn was 3/4 cents higher at $6.80 (all figures US$).

Gains in new-crop corn futures, which track the crop currently being grown, outpaced the front-month contract as the predicted temperatures will stress the plants throughout key development phases.

“U.S. weather continues to be the major focus,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia. “Weather forecasters have the U.S. Midwest’s northwest on a path to an expanding area of dryness and crop stress over the next fortnight.”

The U.S. Department of Agriculture (USDA) on Monday afternoon rated 72 per cent of the U.S. corn crop in good-to-excellent condition in its weekly crop progress report, down four percentage points from a week ago and below the average of estimates in a Reuters poll.

USDA rated 67 per cent of the soybean crop as good-to-excellent in its first 2021 condition ratings for the oilseed, below the average analyst expectations of 70 per cent.

CBOT July soft red winter wheat was up five cents at $6.85. The contract found support at its 50-day moving average.

But MGEX spring wheat for July delivery was 13-3/4 cents lower at $7.71-1/4 on follow-through selling after sinking 3.4 per cent on Monday.

— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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