SINGAPORE: Chicago corn edged higher on Wednesday with a round of bargain-buying supporting prices after the market dropped to its lowest since December 2020 on expectations of bumper US production.
Wheat inched higher, recouping some of the losses triggered by ample supplies from Northern Hemisphere harvests, while soybeans also climbed.
“The US continues to drive corn prices lower given higher production than previously forecasted, which is expected to lead to a surplus in supply,” said Darren Stetzel, vice president for agriculture in Asia at brokerage StoneX.
“The market also sees the funds as net short corn, adding further downward pressure to already bearish fundamentals.”
The most-active corn contract on the Chicago Board Of Trade (CBOT) was up 0.3% at $4.77 a bushel, as of 0407 GMT, after hitting its lowest since December 2020 at $4.73-1/2 earlier in the session. Expectations of ample supplies weighed on corn prices.
Wheat gained 0.2% to $6.24-3/4 a bushel, having dropped earlier on Wednesday to $5.91-1/2 - its lowest since May 31. Soybeans rose 0.6% to $13.13-1/2 a bushel.
The US Department of Agriculture’s (USDA) weekly crop progress report, issued after trading ended on Monday, rated 59% of the corn crop as good to excellent.
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That was up from 57% a week ago and above analysts’ estimates for 58%. The USDA also rated 59% of the soybean crop as “good to excellent”, a jump from 54% last week.
Analysts had expected 55%. Wheat prices are being weighed down by harvest pressure in the Northern Hemisphere, although any disruption to the Black Sea supplies due to the Russia-Ukraine war could support the market.
Ukraine’s air force said on Wednesday a large group of Russian army drones entered the mouth of the Danube river and headed toward river port Izmail near the border with Romania.
A Russian warship on Sunday fired warning shots at a cargo ship in the southwestern Black Sea as it made its way northwards, the first time Russia has fired on merchant shipping beyond Ukraine since exiting a landmark UN-brokered grain deal last month.
US processors crushed more soybeans than expected last month, making it the largest July crush on record, National Oilseed Processors Association data showed on Tuesday.
Commodity funds were net sellers of CBOT corn, wheat, soybean and soymeal futures contracts on Tuesday, traders said. Funds were net buyers of soyoil futures.
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