Corn, soy rebound after sell-off as weather risks weighed
19 Jun 2021
CHICAGO: U.S. corn, soybean and wheat futures rose sharply on Friday, rebounding from steep declines a day earlier on bargain-buying ahead of the weekend and uncertainty about weather in the crop belt, analysts said.
Fresh export interest lent support as this week’s break in futures appeared to stimulate demand. Chinese state-owned importers bought at least eight cargo shipments of U.S. soybeans on Friday, the country’s largest U.S. soybean purchases in 4-1/2 months, two U.S. traders familiar with the deals said.
Chicago Board of Trade July corn settled up 22-1/4 cents at $6.55-1/4 per bushel. July soybeans ended up 66-1/4 cents at $13.96 a bushel and July wheat rose 23-3/4 cents to settle at $6.62-3/4 a bushel.
Weather remains in the spotlight, given continuing risks of drought stress to Midwest crops at a time when markets are looking to large U.S. corn and soybean harvests to ease supply tensions.
Outlooks for cooler and wetter weather weighed on the grain markets this week, adding to broad-based selling in commodities as the dollar firmed and Fed officials projected interest rate hikes as soon as 2023.
But some felt Thursday’s sell-off was overdone.
“The weather forecast yesterday didn’t justify a sell-off of that size or scope. We are putting some premium back in the market today,” said Brian Hoops, president at Midwest Market Solutions.
About 41% of Iowa, the nation’s top corn producer and No. 2 soybean state, was under severe drought on Tuesday, up from less than 10% a week earlier, according to the weekly U.S. drought monitor published on Thursday.
“It’s getting critical for some guys’ corn and soybean crops,” Hoops said. Midwest corn typically begins pollinating, its key reproductive phase, in July.
Wheat futures bounced after sliding to a two-month low on Thursday when seasonal pressure from the start of the U.S. winter wheat harvest added to spillover from the broad rout in commodities. However, drought stress in the northern U.S. Plains spring wheat belt lent support.
Soybeans and by-product soyoil have been particularly volatile, swayed by uncertainty over U.S. biofuel policy and edible oil supply and demand in Asia. Rival Malaysian palm oil futures turned higher on Friday after hitting their lowest since February.