SINGAPORE: Chicago corn jumped to its highest level in more than one month on Tuesday, gaining 2.4% after a US government report showed the crop condition worsened amid hot and dry weather in key regions across the Midwest.
Wheat and soybeans rose more than 1% each. “The market has focussed on reports coming from scouts in the western Midwest,” said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia.
“Crop problems are suspected of being greatest in that region and the reports coming back so far mostly bad.”
The Chicago Board of Trade (CBOT) most-active corn contract was up 2.4% at $6.44-1/4 a bushel, as of 0315 GMT, after climbing earlier in the session to the highest since July 11 $6.44-3/4 a bushel.
Wheat rose 1.3% to $7.98-1/4 a bushel and soybeans added 1.2% to $14.53 a bushel.
Condition ratings for corn and soybeans declined in the latest week, the US Department of Agriculture (USDA) said after the market closed on Monday, bucking analyst expectations for no change as stressful dry conditions continued to impact crops.
CBOT corn may test resistance at $6.28-1/2
In its weekly crop progress report, the USDA rated 55% of the US corn crop in good-to-excellent condition, down from 57% the previous week.
For soybeans, the government rated 57% of the crop as good-to-excellent, down from 58% previously.
South Dakota corn yield prospects and soybean pod counts are well below last year and the three-year average, scouts on an annual tour of top US producing states found on Monday.
South Dakota corn yields were projected at 118.45 bushels per acre (bpa), the Pro Farmer Midwest Crop Tour said on Monday evening, the worst on the tour since 2012 and well below the 2021 crop tour average of 151.45 bpa and the three-year crop tour average of 161.59 bpa.
On the demand front, the USDA said on Monday that weekly export inspections of soybeans totalled 686,583 tonnes in the week ended Aug. 18, in line with market forecasts.
The agency boosted its estimate of the previous week’s soybean inspections to 768,328 tonnes from 744,571 tonnes.
Corn export inspections were 740,508 tonnes and wheat export inspections were 594,273 tonnes. Both were in line with a range of analysts’ estimates.
The European Union’s crop monitoring service MARS on Monday lowered its yield forecasts again for summer crops in the bloc, with major cuts in maize (corn), sunflower and soybeans, as it expected further damage from the recent dry and hot weather.
Crop prospects in the EU have taken on extra significance this year as Russia’s invasion of Ukraine - a major wheat, corn and sunflower exporter - has disrupted Black Sea exports and raised uncertainty over Ukraine’s harvest.
Grain traders union UGA on Monday cut
Ukraine’s 2022 combined grain and oilseeds crop forecast to 64.5 million tonnes from the previous outlook of 69.4 million due to a smaller than expected harvested area caused by the Russian invasion.
The union said in a statement that Ukraine could export 32.8 million tonnes of its key agriculture commodities in the 2022/23 season, including 10 million tonnes of wheat.
Commodity funds were net buyers of CBOT soybean, wheat, soymeal, corn and soyoil futures contracts on Monday, traders said.