Corn futures retreat on profit-taking, still end up 12% for week
03 Jul 2021
CHICAGO: Chicago Board of Trade corn futures retreated on profit-taking on Friday, while soybean futures extended gains fueled by lower-than-expected U.S. acreage estimates and dry weather in part of the Midwest, traders said.
Corn pulled back after surging by the daily, exchange-imposed limit on Wednesday when the U.S. Department of Agriculture shocked traders by estimating that farmers planted fewer acres than expected.
Uncertainty about demand added pressure to prices as a federal appeals court struck down a U.S. rule put in place under former President Donald Trump to expand sales of corn-based ethanol.
It was another disappointment for the biofuels industry after the U.S. Supreme Court last Friday made it easier for small oil refineries to win exemptions from a law requiring increasing levels of ethanol to be blended into their products.
“That’s definitely a second hit,” said Rich Nelson, chief strategist for commodities brokerage Allendale.
Concerns about the potential for lower-than-expect corn imports from China also crept into the market, brokers said.
The most-active corn contract ended down 9-1/4 cents at $5.79-3/4 a bushel but was up nearly 12% for the week. Soybeans settled 3-1/2 cents higher at $13.99, up 10% for the week and matching Wednesday’s closing price. Wheat fell 12-3/4 cents to $6.52-3/4 and finished up 2% for the week.
Traders adjusted positions before the weekend because CBOT markets will be closed on Monday for the Independence Day holiday in the United States.
Next week, analysts said they will keep a close eye on U.S. crop weather as dryness is threatening soybean and spring wheat crops in places like North and South Dakota. A midday forecast on Friday added in beneficial rain for parts of Iowa, the top corn-growing state, Nelson said.
The risk of frost damage to Brazil’s second corn crop, already hurt by drought, helped fanned corn supply fears this week.