CHICAGO: Chicago Board of Trade corn futures neared a six-month high and soybean futures topped a four-month high on Thursday on concerns about unfavorable dryness and heat threatening South American crops, analysts said.
Rain is not expected to bring much relief to southern Brazil, the world’s top soybean exporter, and Argentina in the coming days, weather forecasters said.
Instead, a La Nina weather pattern, which typically causes dryness in both countries, has taken hold and is likely to remain through the winter, said Jake Hanley, managing director of Teucrium Trading.
“The fact that we are in the midst of another La Nina, no matter how strong, is understandably keeping the trade on edge,” Hanley said in a note.
The most actively traded CBOT corn contract settled 3-1/4 cents firmer at $6.05-3/4 a bushel and traded up to $6.07, the highest price since July 1.
Most-active soybeans rose 5-3/4 cents to end at $13.40-3/4 a bushel and hit their highest price since Aug. 19 at $13.42-1/2. Wheat rose 3/4-cent to $8.14-3/4 per bushel at the CBOT and reached its highest price since Dec. 3 at $8.20-1/2.
Corn or soy losses in South America could tighten global supplies and shift export demand to the United States. However, La Nina-related dryness should disappear by next month, said Cristian Russo, an agronomist at the Rosario grains exchange in Argentina.
In US weather, record-setting warmth and dry, breezy conditions will further reduce topsoil moisture in key Plains winter wheat production areas, the US Department of Agriculture said in a daily report.
The USDA, in a separate report, said US exporters in the week ended Dec. 16 sold 811,500 tonnes of soybeans for 2021/2022, a marketing-year low, and 1,000 tonnes for 2022/2023. Analysts had expected 700,000 to 1.85 million tonnes.
Total weekly US export sales were 1.1 million tonnes for corn, compared with estimates for 725,000 to 1.45 million tonnes.
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