(AgWeek) – Chicago soybeans rose again on Wednesday following a sharp jump on Tuesday as forecasts of hot and dry weather across the U.S. Midwest raised fears of damage to crops.
Corn was also firm after the weather rally on Tuesday, and supported too by a U.S. Department of Agriculture (USDA) report forecasting tighter corn supplies.
The Chicago Board of Trade’s most-active November soybean contract rose 0.8 percent to $10.95-3/4 a bushel at 0955 GMT, after rallying some 3 percent on Tuesday.
Soybeans earlier on Wednesday hit their highest since June 30 at $10.97 a bushel. Most active December corn rose 0.6 percent to $3.62-1/2 a bushel and most active September wheat was up 0.7 percent at $4.41-3/4 a bushel.
“We are seeing a continuation of Tuesday’s weather market today, with worry among investors that hot weather currently forecast could damage U.S. soybean crops,” said Frank Rijkers, agrifood economist at ABN AMRO Bank. “A decent U.S. soybean harvest is needed by the world market to meet rising global demand for U.S. soybeans, especially from China, after soybean crop damage in Argentina earlier this year.”
“This is a reason why the market is reacting so dramatically to the unfavorable weather forecasts.”
“Corn is also being supported by the weather worry along with the reduced USDA forecast on Tuesday of U.S. corn stocks.”
U.S. corn supplies will tighten more than expected in the coming months due to rising exports, the USDA said. The USDA estimated U.S. corn stocks at the end of the current 2015/16 season at 1.701 billion bushels, down 7 million bushels from its June estimate.
“Wheat is seeing spillover support from soybeans and corn, along with some worry about crop quality in Europe,” Rijkers said. “But gains in wheat are being limited by the outlook for plentiful global wheat supplies in coming months, with good crops expected in producers like the U.S. and Russia.”
France’s farm ministry expects soft wheat production to shrink by almost 10 percent this year after heavy rain hurt crops in the European Union’s biggest grain producer. But the background view of wheat is still for big world supplies.
For wheat, the USDA raised its 2016/17 U.S. harvest estimate to a bigger-than-expected 2.261 billion bushels from 2.077 billion, due to a good winter wheat crop.
Russia is widely expected to harvest a record wheat crop this year, and favorable weather has been improving prospects in Ukraine.
