Chicago | Reuters — Chicago corn futures rose on Monday on short-covering and position-squaring ahead of key reports due on Tuesday from the U.S. Department of Agriculture (USDA), and word that China was in the market for the grain after futures fell to a seven-week low last week, analysts said.
Wheat rose, bouncing from contract lows on Friday, but the gains were capped by pressure from advancing harvests in the Northern Hemisphere and position-squaring ahead of USDA’s acreage and quarterly stocks reports.
Soybean futures firmed, following the trend.
Chicago Board of Trade (CBOT) July corn settled up 9-1/4 cents at $3.26-1/4 a bushel. July wheat ended up 11-1/2 cents at $4.85-1/2 a bushel and July soybeans finished up 1-1/2 cents at $8.66-1/2 a bushel.
Corn drew support from optimism about export demand.
“There are reports that China is in buying U.S. corn this morning,” said Jeff French, analyst with Top Third Ag Marketing. “We’re definitely the cheapest corn in the world.”
Traders also covered short positions ahead of Tuesday’s USDA reports and the end of the month and quarter. Analysts expect USDA to show a modest shift in U.S. plantings from corn to soybeans.
“We could see a decline in corn plantings, and a slightly higher soybean planting, and it could end up being bearish for both,” said Karl Setzer, analyst at AgriVisor.
However, favourable crop weather and expectations for large harvests hang over the market, limiting rallies.
After the CBOT close, USDA rated 73 per cent of the U.S. corn crop in good-to-excellent condition in a weekly progress report, up one percentage point from a week ago and matching the average of estimates in a Reuters poll.
For soybeans, USDA rated 71 per cent of the crop as good to excellent, up from 70 per cent the previous week. Analysts had expected no change.
“The grain market moves on weather during the summer, not demand,” said Mike Seery, president of Seery Futures. “If we got a drought, that would really help. But the last drought we had this late was 1983.”
— Christopher Walljasper reports on agriculture and ag commodities for Reuters from Chicago.