SINGAPORE/PARIS: Chicago wheat futures extended gains on Thursday, rising more than 1% off earlier lows with the help of bargain buying, while corn edged higher, although forecasts of near-perfect weather across the US Midwest capped gains.
Soybeans were underpinned by news of fresh US exports to Mexico.
The most-active wheat contract on the Chicago Board Of Trade rose 1.25% to $4.66-1/2 a bushel, as of 1142 GMT, having rallied 1.6% on Wednesday.
“The return of the December 2019 (wheat) contract near the lowest levels reached last May is bringing some support to prices with a renewed buying interest,” French consultancy Agritel said in a note.
“US wheat is finding some appeal again as Spring wheat harvests are still underway and running behind previous campaigns.”
Corn was up 0.7% at $3.61 a bushel having closed down 0.7% the previous session when prices hit a May 13 low of $3.56-1/2 a bushel.
“To everyone’s surprise the US corn crop is doing fine as conditions are holding out very well,” said one Singapore-based feed grains trader. “But we must be aware that the crop is not in silos yet.”
US Department of Agriculture late on Tuesday rated 58% of the US corn crop in good-to-excellent condition, up from 57% the previous week, in line with trade expectations.
The crop’s development is behind normal following widespread spring planting delays, but forecasts call for seasonal temperatures throughout September that should prolong the Midwest growing season, raising the odds that crops will have time to mature.
Commodity brokerage INTL FCStone raised its estimate of the average US 2019 corn yield to 168.4 bushels per acre, from 167.4 bushels in its previous monthly report released on Aug. 1.
There could be an impact on next year’s supply of corn on expectations of lower planting in Argentina, the world’s third biggest exporter.
Argentine farmers, anxious about an increasingly murky political outlook and economic turmoil, are turning towards soy over more expensive corn to cut costs, a shift that could impact next season’s harvest.
Farmers said a volatile economic situation in Argentina and the likelihood of a new administration at the end of the year, after President Mauricio Macri was hammered in primary elections, meant soybeans looked a less risky bet than corn.
Soybeans gained 0.2% at $8.77 a bushel, having firmed 0.8% on Wednesday.
Soybean futures drew support from USDA’s confirmation that private exporters sold 451,766 tonnes of US soybeans to Mexico.
Commodity funds were net sellers of CBOT corn futures contracts on Wednesday and net buyers of soybean, wheat and soymeal futures, traders said.