PARIS/MUMBAI: Chicago grains futures extended gains on Wednesday, with corn reaching its highest in nearly two months as results from a widely followed Midwest field tour stoked concern about weather damage to US corn and soy crops.
Drought in China also fuelled chatter about possible increased demand from the major grain and oilseed importer, analysts said.
Crop concerns helped grain markets to shake off strength in the dollar, in turn linked to rising fears of global recession.
The Chicago Board of Trade’s (CBOT) most active corn contract was up 1.5% at $6.65-1/4 a bushel by 1105 GMT, having earlier touched its highest since June 28.
CBOT soybeans were up 1.2% at $14.79 a bushel after reaching a three-week peak.
Indiana corn yield prospects are lower than last year and below the three-year average, scouts on an annual tour of America’s leading grain-producing states found on Tuesday, adding to weaker scores in other states surveyed so far.
“The way numbers are getting revised lower, it’s pretty clear that actual output numbers would be much lower than initial optimism,” said a New-Delhi based trader with a global trading house.
Corn at six-week high as heat curbs US yields; wheat extends climb
However, the market was waiting for tour results on Wednesday in Illinois and Iowa for a better sense of the overall harvest outlook.
Forecasts of rain in the coming week in parts of the Midwest were also tempering crop concerns.
US harvest prospects have taken extra significance since Russia’s invasion of Ukraine has disrupted trade flows.
This week’s rally in Chicago futures has also been supported by China’s longest heatwave on record.
“China’s demand for all grains and oilseeds might improve if the heatwave and drought across the central China causes significant damage to their crops,” research firm Hightower Report said in a note.
CBOT wheat was up 1.2% at $8.09-3/4 a bushel but held below a one-week high touched on Tuesday.
Traders were assessing news that Egypt’s state grains buyer directly purchased 240,000 tonnes of Russian wheat on Monday.
A pick-up in Russian wheat exports after a slow start to the season, along with the resumption of Ukrainian maritime shipments, is seen as a curb on wheat prices, though traders say the ongoing war in Ukraine continues to underpin the market.
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