SINGAPORE: Chicago corn futures edged higher on Thursday, with the market trading close to its highest level in two weeks, supported by concerns over lower production in Brazil.
Soybeans inched higher, while wheat jumped to its highest in more than two weeks as short-covering by investors drove gains in agricultural products.
“Brazilian corn crop is the main worry for the market,” said one trader in Singapore.
“Overall, prices are pretty low to encourage some short-covering with weather threat to the crop.”
The most-active corn contract on the Chicago Board of Trade (CBOT) was up 0.1% at $4.52-1/2 a bushel, as of 0425 GMT, not far from its highest since Jan. 12 at $4.52-3/4 a bushel reached earlier in the session.
The corn market dropped to a three-year low last week. Soybeans gained 0.4% at $12.45 a bushel and wheat rose 0.9% to $6.16 a bushel, after climbing to its highest since Jan. 8 at $6.17-1/4 a bushel earlier on Thursday.
Forecasters are expecting lower production from Brazil’s second corn crop, reflecting a smaller planted area.
Meanwhile, stressful heat is forecast for crop areas of Argentina, which has been on course for a bumper harvest. Commodity funds hold sizeable net short positions in CBOT corn, wheat and soybean futures, leaving all three markets primed for short-covering rallies.
Commodity funds were net buyers of CBOT wheat, corn and soymeal futures contracts on Wednesday, traders said.
The funds were net sellers of soyoil futures and net even in soybeans, they said.
Strong domestic demand is tightening India’s corn supplies, with the country’s consumption of the animal feed ingredient seen growing by up to 2 million metric tons a year, a senior executive of global trading firm Louis Dreyfus said.
In wheat, Russia’s Sovecon agricultural consultancy raised its forecast of the country’s 2024 wheat crop to 92.2 million tons, from 91.3 million in December, and now not far from the 92.8 million tons harvested in 2023.
Comments