CHICAGO: US grain and soyabean futures rose on Tuesday in a turnaround from losses the previous session, as concerns increased about unfavourable weather in crop-growing regions of South America. Traders are watching the effects of heat and dryness in Argentina and rains in Brazil amid worries about potential yield losses.
The countries compete with the United States for export sales to importers like China, and US supplies have tightened as China has ramped up purchases.
“The heat in Argentina is still worrisome and there continue to be concerns about an extension of the Brazilian wet season causing more supply concerns,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.
“All of these South American supply concerns are expected to eventually prompt more Chinese buying of US corn in the spring/summer time period.”
Most-active corn futures jumped 8-3/4 cents to $5.47 a bushel by 11:20 a.m. CDT (1720 GMT) at the Chicago Board of Trade (CBOT). Earlier, the contract fell to a session low of $5.31-1/2 a bushel, the weakest since Feb. 11.
Most-active soyabean futures traded 18 cents higher at $14.09-1/4 a bushel.
In Brazil, the world’s top soyabean exporter, widespread rains in the Mato Grosso region over the next week should keep fieldwork behind the normal pace, according to weather firm Maxar. In Argentina, major corn-growing areas are increasingly likely to suffer hot, dry weather, said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia.
“That weather might prove to be enough for forecasters to reduce their crop estimates,” he said.
In the CBOT wheat market, the most-active contract rose 18 cents to $6.68-1/4 a bushel. The US Department of Agriculture in a weekly report on Monday lowered condition ratings for wheat crops in Kansas, Texas and Oklahoma.
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