CHICAGO: Chicago corn futures bounced higher on Tuesday, after a US government crop conditions report showed good-to-excellent ratings for corn fell by more than expected, raising concerns about the Midwest crop as it heads toward a key pollination phase of development.
Wheat futures rallied on short-covering and bargain buying after three straight sessions pushed the most-active contract to its lowest since February. Soybean futures also were supported by a bigger-than-expected decline in crop conditions, and wider gains in financial markets after China eased COVID-19 rules for travellers.
Crude oil and other commodities rose as China’s move improved economic sentiment that has been dampened by its strict COVID-19 policy and interest rate hikes by central banks.
In a report released after Monday’s market close, the US Department of Agriculture (USDA) cut its rating of the country’s corn crop in good-to-excellent shape to 67%, down 3 percentage points from a week ago, and lowered the soybean crop good/excellent score by 3 points to 65%.
The ratings decline suggests hot, dry weather earlier in June had some impact on corn and soybeans, although cooler conditions since last week have tempered crop concerns.
But some of Tuesday’s market movements was also due to traders jockeying for position ahead of Thursday’s key US Department of Agriculture’s reports that will show how much farmers planted in the spring and what is left from last year’s harvest, said Don Roose, president of Iowa-based US Commodities.
“It’s one of the top two or three reports of the year, and I would expect huge market price volatility after they come out,” Roose said.
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