Chicago | Reuters – U.S. corn futures on Wednesday rallied 2.5 percent to their highest level in more than two months, supported by signs of robust ethanol production that bolstered demand for the yellow grain, traders said.
The strength in corn spilled over into the soybean and wheat markets.
“You had humongous ethanol numbers,” said Jim Gerlach, president of brokerage A/C Trading. “Profit margins are just off-the-charts good right now. Any time margins are good, everything is good.”
Weekly U.S. ethanol production rose to 1.106 million barrels per day, according to the U.S. Energy Information Administration. The weekly total was the second biggest on record, trailing only the December 2017 total of 1.108 million barrels per day.
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Ethanol stocks dropped to 19.925 million barrels despite the increased production, EIA said.
Chicago Board of Trade December corn futures were up 13-3/4 cents at $5.57-1/4 a bushel. Prices peaked at $5.63-1/4, the highest for the most-active contract on a continuous basis since Aug. 19.
CBOT December soft red winter wheat gained 7-1/2 cents to $7.59-3/4 a bushel, with the market also receiving support from hopes of a pick-up in export demand for U.S. supplies as global stocks tighten.
European wheat futures rose to their highest level since 2008 on Tuesday before paring some of their gains on Wednesday.
“Prices are being driven up by the tight supply – with low and still falling inventories in the key export countries – and the mixed assessment of the U.S. winter wheat that has now emerged,” Commerzbank said.
Egypt’s GASC on Wednesday said that it bought 180,000 tonnes of wheat from Russia, 12,000 tonnes of wheat from Ukraine and 60,000 tonnes of wheat from Romania in its latest tender.
CBOT November soybeans were up 1-1/4 cents at $12.39-1/4 a bushel.
– Additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris
