U.S. grains: Corn, soy rise on broad commodities strength
Chicago | Reuters — U.S. corn and soybean futures closed higher on Tuesday, following broad strength in commodity and equity markets tied to easing concerns about the global economy, traders said.
The dollar index retreated from two-decade highs set last week, softening after Australia’s central bank surprised investors with a smaller-than-expected interest rate hike. The move calmed fears that higher rates globally would trigger a recession that could dent demand for commodities.
“If you look at the outside markets, you’d say it should be a ‘risk-on’ environment,” said Don Roose, president of Iowa-based U.S. Commodities.
Chicago Board of Trade December corn settled up 2-1/4 cents at $6.83 per bushel and November soybeans ended up 9-1/2 cents at $13.83-1/2 a bushel (all figures US$).
Strength in crude oil helped lift grain futures, given corn’s role as the main U.S. feedstock for ethanol fuel and soyoil’s use in biodiesel, Roose said.
But seasonal pressure from the expanding U.S. harvest hung over the market, capping rallies, while traders awaited more information about the size of U.S. crops.
After the CBOT close, commodity brokerage StoneX raised its estimate of the average U.S. corn yield to 173.9 bushels per acre, from 173.2 previously, but lowered its corn production estimate to 14.056 billion bushels, from 14.168 billion last month.
For soybeans, StoneX cut its forecast of the U.S. yield to 51.3 bu./ac., from 51.8 previously, and lowered its soy production estimate to 4.442 billion bushels, from 4.515 billion.
The U.S. corn harvest was 20 per cent complete as of Sunday, the U.S. Department of Agriculture (USDA) said in a weekly progress report, trailing the five-year average of 22 per cent. The soybean harvest was farther ahead at 22 per cent complete, but still behind its five-year average of 25 per cent.
CBOT soft red winter wheat futures bucked the firm trend and closed lower on technical selling and profit-taking after last week’s two-month highs. Benchmark CBOT December wheat fell nine cents to finish at $9.03 a bushel, but K.C. December hard red winter wheat ended flat at $9.88-3/4, underpinned by worries about dry conditions in the Plains hard wheat belt.
Traders continue to monitor tensions between Russia and Ukraine, which are among the world’s leading grain exporters.
Ukraine’s winter wheat sowing for the 2023 harvest has covered only a third of the area completed at the same time last year, data from the European country’s agriculture ministry showed on Tuesday.
— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.
