Chicago | Reuters — U.S. soybean and corn futures hit their highest in a week and soyoil touched a one-month peak on Tuesday as worries about crop prospects in drought-hit Argentina supported prices, analysts said.
“It’s all about drought in Argentina… and adding more risk premium,” said Don Roose, president of Iowa-based U.S. Commodities. “The key is (whether) Brazil’s larger (soy) crop starts to compensate.”
CBOT March soybeans settled up 21-1/2 cents at $15.48-3/4 per bushel after rising to $15.49, the contract’s highest since Feb. 13 (all figures US$). March soyoil hit its highest since Jan. 20. CBOT March corn ended up 2-3/4 cents at $6.80-1/2 a bushel.
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Argentina is a major soy and corn producer, as well as the world’s biggest exporter of soy products including soyoil and soymeal. Precipitation in Argentina’s crop belt over the next 10 days “will remain limited in coverage and intensity, which will allow extensive dryness and stress to continue on late crop growth,” space technology company Maxar said in a daily weather note.
Argentina’s corn exports should fall about 40 per cent year-on-year between March and June, the Rosario Grains exchange said on Friday.
Worries about Argentina overshadowed market pressure from field work in Brazil, where farmers are harvesting what is expected to be the largest soy crop on record. Brazilian growers harvested 25 per cent of the soybean area planted for 2022-23 through last Thursday, agribusiness consultancy AgRural said on Monday, although rains have slowed progress in some areas.
CBOT March soft red winter wheat finished down 15 cents at $7.50-1/2 a bushel, pressured by a firmer dollar and export competition from Black Sea suppliers.
Traders continue to gauge prospects for the continuation of a wartime Black Sea shipping corridor from Ukraine amid an escalation in fighting in eastern Ukraine. Russian President Vladimir Putin on Tuesday delivered a nuclear warning to the West over Ukraine, a day after his U.S. counterpart Joe Biden visited Kyiv.
Meanwhile, a winter storm this week should bring an insulating blanket of snow to the northern Plains and Midwest, but the precipitation is expected to miss drought-hit areas of the southwestern Plains winter wheat belt.
Traders await the U.S. Department of Agriculture’s annual two-day Outlook Forum starting on Thursday, in which USDA is expected to release preliminary forecasts for 2023 plantings and production of major U.S. crops.
— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
