Corn, soybeans lead grains higher as weather worries revive
- Soybeans gain on talk of Chinese interest in US exports
- EU heat worries drive Paris corn to highest in nearly three years
- Wheat pulled higher, finding support too from Saudi purchase
Grains made a strong start to the week, led by soybeans, on hopes for Chinese purchases from the US, while corn found support from concerns over hot weather on both sides of the Atlantic.
Soybean futures for August-26 delivery jumped by 3.9% in midday deals in Chicago, to one-month highs, on fresh speculation of Chinese interest in US exports. Negotiators from the two countries talked on Thursday about reducing tariffs, in an effort to reboot purchases by China, the top soybean importer, from the US, the second-ranked exporter.
Firm US export data for last week - of 528Kt, up from 444Kt the week before, and towards the upper end of the range of market expectations – backed the more upbeat view of US soybean export prospects.
Furthermore, there remains some unease over the weather outlook in the US, where the Plains is poised for a hot and dry fortnight, with rain likely to prove sparse in the eastern Midwest too.
This is particularly a test for corn crops, undergoing the weather-sensitive pollination process, with a fresh heatwave in Europe a major talking point as well.
Temperatures are one against forecast to hit highs approaching 40 Celsius in France, the EU’s top corn grower, hitting levels 8-15 degrees above normal.
The heat will intensify in eastern Europe next week, even as it lingers in western Europe.
Paris corn futures for November-26 headed for the close up by 3.7%, aiming at the highest close in nigh on three years for a best-traded contract.
The Chicago September-26 corn lot added 3.0% to reach one-month highs. US corn exports last week were, at 1.64Mt, unexpectedly strong, beating the 1.3-1.6Mt number traders had forecast.
Wheat attracted spillover support, besides luring some buying from evidence of a large importer in the market, in Saudi Arabia’s purchase of 661Kt.
Chicago wheat for September-26 rose by 1.7%, helping 1.4% headway in its Paris milling wheat peer, despite pressure from an expanding European harvest.
London feed wheat for November-26 settled up 1.3% back above the £180/t mark, as well as its 20-day and 200-day moving averages.
Rapeseed for November-26 added 1.1% in Paris, buoyed by the headway in fellow oilseed soybeans, as well as concerns that Europe’s heat could complicate the EU’s newly-started harvest, besides damaging prospects for the region’s sunseed production.
For more detailed analysis, see CRM Agri’s Weekly Grains Outlook, as published earlier on Monday.
