Chicago | Reuters — Chicago Board of Trade (CBOT) soybean futures rose on Tuesday, supported by concerns about a La Nina weather pattern hindering crop development in the U.S. Midwest this summer with hot temperatures and dry conditions, traders said.
Wheat futures also advanced, rising for the fifth straight day amid a round of short-covering and concerns about heavy rains in Europe damaging the crop there.
Corn settled in positive territory too, supported by the gains in soybeans in wheat. Corn futures closed just below the fresh 10-1/2 month high hit during the trading session.
Soybeans traded in negative territory early in the session but surged higher after some midday weather forecasts spooked investors.
“There are some private forecasters that are maintaining their drum beat about July weather being hotter and dryer than normal,” said Brian Hoops, president and senior market analyst for Midwest Market Solutions. “We are putting massive premiums into new-crop soybean futures.”
The U.S. Agriculture Department’s announcement that private exporters sold 180,000 tonnes of soybeans to China for 2016-17 delivery, added more support to prices. It was the second day in a row the government announced a sale of U.S. supplies.
Chicago Board of Trade July soybean futures settled up three cents at $11.41-1/4 a bushel (all figures US$). New-crop November soybeans gained 11 cents, to $11.16-3/4 a bushel.
CBOT July corn was 1/2 cent higher at $4.27-3/4 a bushel, and CBOT July wheat rose 1-1/2 cents to $5.09 a bushel.
Gains in corn and wheat were kept in check by a good crop ratings report released by USDA Monday afternoon.
USDA said farmers had nearly completed planting corn and that 75 per cent of the crop was in good-to-excellent condition, a score that beat market expectations.
Winter wheat ratings fell by one point to 62 per cent, but the relatively good score and drier weather for the U.S. harvest under way have underlined ample U.S. supplies.
“The crop conditions displayed by USDA yesterday remain satisfactory,” French consultancy Agritel said in a note. “However, U.S. operators are cautious about the medium term and are integrating a summer risk premium.”
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.