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Markets

Corn rebounds on US weather concerns, soy hits 10-year high

  • Corn rises 1% as dry weather in parts of US Midwest supports.
  • Global edible oil prices jump, US soyoil hits 10-year high.
Updated 03 Jun, 2021

SINGAPORE/PARIS: Chicago corn futures gained more than 1% on Thursday, recouping some of the previous session's losses, with concerns over dry US weather and strong demand underpinning prices.

World edible oil prices jumped on supply concerns with soybean oil hitting its highest in a decade, while soybeans climbed for a third consecutive session.

"The situation in South America has been a concern effect, and now US Midwest is turning dry. It might be a bit early to lower production estimates for US corn crop," Phin Ziebell, agribusiness economist at National Australia Bank, said.

"The edible oil side is more bullish with higher use in biofuels. Energy prices are also climbing."

The most-active corn contract on the Chicago Board of Trade (CBOT) was up 1.1% at $6.82-1/4 a bushel, as of 1045 GMT, after dropping 2% on Wednesday.

"The weather forecast calls for dry and hot weather for the next two weeks, which will limit the downside potential for this product (corn)," French consultancy Agritel said on Thursday.

Soybean oil futures added 1.5% after hitting their highest since 2011 at and soybeans rose 1.3% to $15.82-1/2 a bushel. Wheat gained 1% at $6.94-1/2 a bushel.

Hot and dry weather in parts of the US Midwest is causing concerns over yields of newly planted corn and soybean crops, following a severe drought in Brazil.

Brazil's worst water crisis in almost a century will impact river navigation and make transportation of goods more expensive in the world's largest exporter of commodities ranging from soybeans to coffee and sugar.

Malaysian palm oil futures jumped 3% while China's Dalian palm oil prices gained more than 5%.

Russia's new formula-based grain export taxes will remain in place as long as there is increased global demand for food, Deputy Prime Minister Victoria Abramchenko told Reuters.

Commodity funds were net sellers of CBOT corn, wheat and soymeal futures contracts on Wednesday and net buyers of soybeans and soyoil, traders said.

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