U.S. grains: Corn, soy extend gains on outlook for dry weather

Chicago | Reuters — Chicago Board of Trade corn and soybean futures rose about one per cent on Wednesday, extending gains from the previous session on outlooks for mostly dry weather that likely will stress U.S. crops, traders and analysts said.

Corn and soy prices came off their session highs at midday as investors adjusted their positions to match the latest weather models. MGEX spring wheat futures were lower on a profit-taking setback while CBOT wheat sagged on pressure from ample U.S. winter wheat stockpiles.

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“The (weather) models are jumping around. Yesterday around this time of day, they went wetter. This time, the heat is there,” U.S. Commodities president Don Roose said.

Corn crop condition ratings declined earlier this week in top-producing states of Iowa, Illinois and Nebraska, and extended outlooks for limited rainfall were seen as threatening to corn plants during their yield-setting pollination phase.

CBOT September corn futures finished 5-1/2 cents higher at $3.82-1/2 per bushel (all figures US$). The contract has traded in a relatively narrow range this week, after last week notching both a one-year high of $4.04-3/4 and a subsequent multi-week low of $3.69-3/4.

CBOT August soybeans were up 10-1/4 cents at $9.99-3/4 per bushel, closing at the highest levels since July 13.

CBOT September wheat were down 3/4 cent at $5.03 per bushel and MGEX September spring wheat off five cents to $7.75-1/2.

“Like corn, the soybean market is weather watching,” said analyst Tobin Gorey of Commonwealth Bank of Australia.

Investment funds were net buyers of corn and soybean futures contracts and net sellers of wheat futures, traders said.

The U.S. Department of Agriculture on Thursday will release weekly U.S. grain and soy export sales that will show whether global importers bought U.S. supplies during a volatile week of futures trading last week.

The Taiwan Flour Millers’ Association bought cargoes of U.S. milling wheat in an international tender that closed earlier on Wednesday, with prices for spring wheat rising sharply, European traders said.

“What is striking is the very strong increases in export prices for U.S. spring wheat following the fears of crop damage after hot dry weather in the U.S.,” one European trader said. “U.S. spring wheat prices have risen by around $60 a tonne in the last month.”

— Michael Hirtzer reports on commodity markets for Reuters from Chicago. Additional reporting for Reuters by Nigel Hunt in London and Colin Packham in Sydney.

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