(Nasdaq) – Prices of grain and soybean futures rose on Tuesday, reflecting a diminished crop outlook and expectations that this year’s harvest may be smaller than originally thought.
Corn and soybean prices advanced as rains swept across the U.S. Farm Belt, prompting concern about the health of some crops after a spell of hot, dry weather threatened others earlier in the month. Analysts widely expect federal data due for release at 4 p.m. EDT to show crop conditions declined last week by at least a percentage point.
Soybean prices especially got a boost from expectations for lower crop-condition ratings, as recent dryness in parts of the U.S. Midwest has spurred worry that plants had been stressed prior to reaching maturity, potentially trimming this year’s harvest.
Soybean futures for November delivery, the most-active soybean contracts, rose 12 3/4 cents, or 1.5%, to $8.79 1/4 a bushel at the Chicago Board of Trade. Lightly-traded September soybean futures gained 13 1/2 cents, or 1.5%, rising to $ 8.90 3/4 a bushel.
Prices for the oilseeds also rose because of a rally in global stocks on Tuesday, after volatility in recent weeks, as investors’ worried about the economic health of China, a major buyer of U.S. commodities, including soybeans.
Meanwhile, corn prices also rebounded after falling to a nearly one-year low earlier in the month, as crop-yield reports from the early U.S. harvest came in below expectations and some market participants grew more convinced the government would lower federal crop estimates for this year’s harvest.
Disappointing harvest reports and expectations that the U.S. Department of Agriculture will lower forecasts for corn production in its monthly supply-and-demand report on Friday bolstered prices for the grain.
A report from the USDA showing private exporters had booked sales of 120,000 metric tons of soybeans and 120,000 tons of corn for during the 2015-16 crop year also buoyed prices, analysts said. Concerns over slow demand recently pushed soybean prices to a six-and-a-half year low, while corn last week dropped to its lowest price since Oct. 2014.
CBOT December corn futures, the heaviest traded contract, climbed 5 1/4 cents, or 1.5%, to $3.68 1/4 a bushel, while September corn gained 5 1/2 cents, or 1.6%, to $3.55 a bushel.
Strength in corn and soybean markets also lifted wheat prices, analysts said. Most-active December wheat futures rose 7 1/4 cents, or 1.6%, to $4.75 a bushel. Lightly traded September wheat climbed 7 1/2 cents, or 1.6%, to $4.65 1/4 a bushel.
