(Reuters) – U.S. corn futures climbed for the second time in three days on Thursday, gaining more than 1 percent on a strengthening cash market and persistently large weekly export sales.
Soybeans also rallied more than 1 percent amid strong export sales, technical buying and short covering. A 3 percent surge in soyoil amid good export sales and soaring palm oil prices was only minimally supportive to soybeans.
Wheat edged higher on good export demand and concerns about global supplies amid adverse weather in key exporters Australia and Argentina.
“The corn price action today is founded upon the technical turnaround from earlier in the week. We followed that up with a strengthening cash basis,” said Mike Zuzolo, president of Global Commodity Analytics.
“We’re seeing the corn basis push higher in some areas that had very, very good crops. And for the third week in a row, corn export sales were near or above one million tonnes and a third of that was for China,” he said.
The U.S. Department of Agriculture said net corn export sales last week totalled 945,100 tonnes for current-marketing-year shipment, at the high end of trade expectations for 750,000 to 950,000 tonnes.
Soybean sales topped trade forecasts at nearly 1.4 million tonnes last week.
Chicago Board of Trade December corn rose 6 cents, or 1 percent, to $4.23 per bushel after hitting a three-year spot-contract low of $4.10-3/4 on Monday.
CBOT January soybeans climbed 17-3/4 cents, or 1.4 percent, to $12.91-1/2 a bushel. Gains accelerated late in the session as the contract rose above its 100-day moving average of about $12.87.
December soyoil surged 1.22 cents, or 3 percent, to 41.54 cents per lb, the strongest percentage gain in nearly three months.
Commodity funds bought an estimated net 7,000 contracts each of corn and soybeans and a net 5,000 soyoil contracts.
“It’s the palm oil that’s driving soybean oil up. Malaysian palm jumped to multi-month highs because of declining stocks in Malaysia,” said Sterling Smith, futures specialist for Citigroup. “Also, palm oil can’t be used for biofuels in the Northern Hemisphere in the winter because it gels … so that is improving demand for soybean oil and canola,” Smith said.
CBOT December wheat added 1-1/2 cents, or 0.2 percent, to $6.48-3/4 a bushel.
Rains in Western Australia and frost on the country’s east coast have hit wheat crops in the world’s No. 2 exporter, dragging down quality and reducing harvests.
Poor weather also curbed wheat output in fellow southern hemisphere producer Argentina. The Rosario Grains Exchange forecast that country’s wheat crop at 9.1 million tonnes in its first estimate of the season, well below the 11-million-tonne view of the U.S. Department of Agriculture.
Heavy rains in Europe have disrupted the sowing of winter wheat in France and may lead to some loss in planned area, but conditions have been generally favorable in Germany and plantings are up sharply in Britain.
