Corn edges higher, with focus on weather and NAFTA

LONDON: Chicago corn futures edged higher on Thursday, recouping some of the previous session's losses, as the market kept a close watch on planting delays in the US and the future of the North American Free Trade Agreement (NAFTA).

The Chicago Board Of Trade's most active corn contract rose 0.3 percent to $3.67-3/4 a bushel by 1120 GMT, having closed 1.3 percent down in the previous session.

Rains have slowed corn plantings but dealers said forecasts indicate that conditions should be dry in the next few days in corn-growing areas such as Iowa, northern Illinois, southern Wisconsin and Minnesota, though rains could persist in other areas including southern Illinois and Indiana.

"Meteorologists removed some of the rain in their extended forecasts for the US Midwest, which prompted traders to also remove some of their weather premium," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

"We suspect a media blitz yesterday regarding US trade policy was probably also a contributor to the day's falls."

A senior Trump administration official said on Wednesday that a draft executive order to withdraw the United States from NAFTA was under consideration.

Such a move would threaten corn exports to Mexico, one of the top three markets for US farm production.

US President Donald Trump, however, later told the leaders of Canada and Mexico on Wednesday that he will not terminate the NAFTA treaty at this stage, but will move quickly to begin renegotiating it with them.

Chicago wheat futures were also higher, with the most active contract up 0.35 percent at $4.28 a bushel.

US wheat drew some support from concerns about unfavourable weather expected in the southern plains this weekend, which could damage developing winter wheat.

May wheat futures in Paris fell, however, by 0.25 euros, or 0.15 percent, to 167 euros a tonne.

Dealers said the euro continued to firm against the dollar on Thursday, weighing on European prices.

Chicago soybean prices were little changed in the most active contract, down a marginal 0.03 percent at $9.56-1/4 a bushel.

The weakness in Brazil's currency has been weighing on soybean prices, which closed 0.9 percent down on Wednesday.

"Soybeans were penalised by the weakness of the Brazilian real, allowing Brazilian origins to be more competitive," French analyst Agritel said in a market note.