(Reuters) – July 18 Chicago corn rose one percent on Monday with the market snapping two sessions of declines as forecasts of hot and dry weather in the U.S. Midwest raised concerns about yield losses amid strong demand.
Wheat rose about half a percent on the back of gains in corn, although ample supplies kept a lid on the market, while soybeans were little changed.
The Chicago Board of Trade most-active corn contract rose one percent to $3.62 a bushel by 0311 GMT, having lost 3.1 percent in the past two sessions.
Wheat rose 0.5 percent to $4.27 a bushel and soybeans were little moved at $10.57 a bushel.
“The U.S. Midwest received some welcome rain over the weekend, as did parts of the Southeast and Delta. Temperatures are expected to periodically rise above 40 degrees,” said Tobin
Gorey, director of agricultural strategy at Commonwealth Bank of
Australia.
“The market will remain at the mercy of the weather models.”
Corn in the heart of the Midwest is pollinating, a crucial phase in determining yield. Hot and dry conditions during pollination can cut yield prospects.
At the same time there is strong demand for U.S. corn shipments amid lower production in rival supplier Brazil.
Large speculators cut their net long position in CBOT corn futures in the week to July. 12, regulatory data released on Friday showed.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and cut their net long position in soybeans.
The wheat market is being weighed down by ample world supplies and record yields being reported from the harvest of hard red winter wheat crop in the United States.
Record-high yields are helping U.S. farmers to harvest a bumper crop of hard red winter wheat, the most common variety here, but prices have tumbled as the world is awash in supplies.
The market is keeping a close watch on Argentina’s grain truckers who have threatened to go on strike on Monday if they do not reach a deal over hauling rates, the Federation of Argentine Transporters said on Friday.
The threat is the latest in a series of wage disputes driven by Argentina’s double-digit inflation rate. The country is the world’s top exporter of soymeal livestock feed, its No. 3 soybean supplier and No. 4 exporter of corn.
