Grain futures advanced, corn rose to the strongest level since October, on speculation the dry weather in Brazil may harm crops. Meanwhile, soybeans increased to a 5-month high, while wheat touched the strongest level in more than a month.
On the Chicago Board of Trade, corn futures for March delivery added 0.34% to trade at $4.4713 a bushel by 15:28 GMT. Futures hit a session high at $4.4738 per bushel, the strongest since October 18, while day’s low was touched at $4.4462 per bushel. Corn has advanced 7.3% this year after it lost nearly 40% in 2013, the steepest annual drop on record and the worst annual performance since at least 1959.
Yesterday, US markets were closed, due to a federal holiday honoring the birthday of the first President of the US, George Washington.
According to data by the US Commodity Futures Trading Commission, hedge-fund managers and other large market players switched to a net-long position in corn futures for the first time in almost eight months. Investors take a net long-position, when they expect higher prices.
“The dry conditions that hurt soybeans are also impacting corn,” Vanessa Tan, an investment analyst at Phillip Futures Pte, said in a Bloomberg interview from Singapore today.
DTN.com reported on February 18 that recent showers eased some stress on corn and soybeans, but rainfall is still insufficient, especially in the Rio Grande du Sul region, after the prolonged period of hot and dry weather conditions. The latter diminished soil moisture and probably harmed some of the corn and soybeans crops. During the weekend, rainfall will probably disrupt the harvest in the Mato Grosso producing region.
Meanwhile, soybeans and corn producing regions in central Argentina will benefit from adequate to surplus soil moisture, except some areas where recent heavy storms have caused serious flooding. Scattered showers and thundershowers today and on Wednesday will maintain soil moisture and will be beneficial for most of the crops.
Elsewhere on the grains market, soybeans futures for settlement in March rose 1.3% to trade at $13.5563 per bushel by 15:31 GMT. Prices touched a session high at $13.5800 per bushel, the strongest level since September 19, while day’s low stood at $13.3562 per bushel. The grain settled last week 0.5% higher, after adding 3.7% in the previous 5-day period. However, the oilseed has lost 8.5% in 2013.
Wheat touches six week high
On the Chicago Board of Trade, wheat futures for settlement in March added 1.48% to trade at $6.0788 per bushel by 15:32 GMT. Prices touched a session high of $6.0800 per bushel, the strongest level since January 7, while day’s bottom was touched at $5.9888.
The grain settled last week 4.1% higher, the biggest gain since the period ended September 27. However, wheat slumped 22% last year, marking the largest annual decline since 2008, on expectations for a record global output of 712.7 million tons, according to data by the US Department of Agriculture.
DTN’s February 18th forecast called for precipitation during the next few days over the Midwest, with no significant cold weather expected through the end of the week. However, next week the weather bears watching as there is some risk of colder air moving into the Midwest.
Meanwhile, the website reported that in the Southern Plains a return to colder weather is expected in the north and east US region in the next six-to-ten-day period. The cold air will probably remain outside the Plains wheat belt, but should be watched closely.
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