Chicago | Reuters — U.S. corn and soybean futures rose on Wednesday as traders assessed U.S. Midwest rain forecasts after a recent dry spell, and awaited an expected revision in U.S. planting estimates following spring rains.
Wheat recovered from Tuesday’s technical-driven losses, despite healthy Northern Hemisphere harvests and a steady dollar keeping a lid on prices.
Grain prices bounced off lows as stock and energy markets pared steep initial losses. Investors were reluctant to take on large positions in grain futures ahead of Monday’s U.S. Department of Agriculture (USDA) monthly supply and demand report, traders said.
The report is widely expected to update the government’s U.S. corn and soybean planting estimates, amid widely differing market assessments of this year’s acreage.
“The market is going to continue to swing like a pendulum until the August 12th report comes out,” said Jim Sullivan, executive vice president of Leese Trading Group. “Because of this back and forth, the market really isn’t actually doing much.”
Sullivan added that once the report comes out, the uncertainty should ease and the data could provide more clarity.
The return of rain this week weighed on corn prices on Wednesday, with some weather models showing needed moisture for developing crops. But the forecasts were inconsistent about how much precipitation would fall in the week ahead.
The most active corn futures on the Chicago Board Of Trade closed up 1-1/2 cents, or 0.6 per cent, at $4.14 a bushel on Wednesday, having ended slightly lower in the previous session (all figures US$).
The most active CBOT soybean futures settled up one cent, or 0.2 per cent, at $8.66-3/4 a bushel, having closed marginally lower on Tuesday.
The risk of prolonged weakness in Chinese demand for U.S. supplies was also hanging over the soybean market.
China has halted U.S. agricultural purchases in a deepening trade war with Washington, while overall Chinese demand for soybeans is set to be cut by a swine disease that has decimated the world’s biggest pig herd.
CBOT wheat was down 4-1/4 cents, or 1.2 per cent, at $4.88-1/4 a bushel, as it struggled to recover from a two per cent slide on Tuesday.
Abundant global supplies of wheat remained an obstacle for U.S. export prospects, while a firm dollar has also made U.S. supplies less competitive.
No U.S. wheat was offered in a tender held by Egypt on Tuesday, in which the world’s top wheat importer purchased 415,000 tonnes of Russian, Romanian and Ukrainian crop.
— Reporting for Reuters by Barbara Smith in Chicago; additional reporting by Karl Plume in Chicago, Gus Trompiz in Paris and Colin Packham in Sydney.