Corn hits 8-year high as dry weather in Brazil raises supply concern
03 May 2021
HAMBURG: Chicago corn futures rose on Monday, building on strength seen last week to hit their highest since March 2013 as dry weather in Brazil raised concerns about global supplies.
Wheat rose on spillover support from corn, while soybeans were underpinned by strong vegetable oils markets.
Soybeans rose 0.7% to $15.46-1/4 a bushel, close to 8-1/2 year highs hit last week. Wheat rose 1.0% to $7.42-1/4 a bushel.
“Worry about the Brazilian corn crop and Brazilian dryness continues to be the driver of the corn market,” said StoneX commodity risk manager Matt Ammermann. “U.S. cash corn markets are firm, with farmers out in the fields working on sowings rather than selling their inventories.”
“A question hanging over the market is about what will happen to the large volumes of U.S. corn China bought in the last couple of months.”
“If this is shipped out it would make U.S. old crop supplies even tighter. But China naturally bought the corn because it needs it.”
Brazil’s 2020/2021 total corn crop estimate was lowered by almost 8% to 104.1 million tonnes as dry weather hits yields of the country’s second corn plantings, forecaster Safras & Mercado said on Friday.
“Wheat is firm on expectations expensive corn will generate more use of wheat in animal feed. Dryness in the U.S. Northern Plains and parts of Canada is also a concern,” Ammermann said.
Soybeans are being supported by firm prices of soyoil and other vegetable oils.
“U.S. weather looks like permitting a good rate of soybean plantings, but with oil crop soybean supplies tight there is little leeway for error if the U.S. crop faces weather problems,” Ammermann added.