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Corn, soybeans hit new eight-year highs on supply risks

  • Corn sets another highest since March 2013.
  • Parched southern Brazil fuels corn supply fears.
  • Soybeans at 8-1/2 year top on veg oil surge, US acreage fight.
  • Wheat near 8-year peak; corn rally seen shifting feed demand.
Updated 07 May 2021

PARIS/SINGAPORE: Chicago corn and soybean futures rose to their highest in over eight years on Friday as adverse crop weather in Brazil and North America kept the focus on supply risks as Chinese demand erodes global availability.

Rising corn and soybean prices reflected both a need to curb short-term demand and encourage US farmers to increase plantings to replenish tight stocks later this year, analysts said.

Wheat was also higher, trading near an eight-year peak, as the corn rally was expected to shift more livestock feed demand towards wheat.

"The same story - supply is tightening as Brazil's corn crop shrinks - continues to drive prices higher," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

Grains have contributed to a spike in agricultural commodity markets. World food prices increased for an 11th consecutive month in April to their highest since May 2014, the United Nations food agency said on Thursday.

The most-active corn contract on the Chicago Board Of Trade (CBOT) was up 1.0% at $7.25-3/4 a bushel by 1138 GMT. It earlier reached $7.28-3/4, its highest since March 2013.

Weather forecasts continued to show little rain for parched southern Brazil in the coming two weeks, raising the threat of deteriorating yields for the country's upcoming second annual corn harvest.

"Brazil is the June to September bridge to the US corn harvest," said Michael Magdovitz, commodities analyst with Rabobank. "It's needed more than ever but it's not forthcoming."

Weekly US export data on Thursday suggested high prices may be slowing demand. US corn export sales totalled 243,500 tonnes in the week ended April 29, below a range of analyst estimates.

CBOT soybeans were up 0.6% at $15.79 a bushel, after earlier touching $15.88, a highest since October 2012.

Soybeans had rallied less than corn last month, curbed by a big Brazilian harvest and concern that renewed outbreaks of African swine fever would reduce Chinese demand for feed.

But a latest surge in vegetable oil prices, including a 13-year high for palm oil, has put attention back on tight oilseed supplies worldwide.

China's soybean imports, meanwhile, rose 11% in April from the same month a year earlier, boosted by the arrival of some delayed Brazilian cargoes, customs data showed on Friday.

CBOT wheat was up 1.2% at $7.62-1/4 a bushel, near last month's eight-year peak of $7.69-1/2.