Grain prices are higher as soybeans and crude oil end the day in a positive trend; wheat is up, while corn is mixed
Chicago Board of Trade soybeans futures closed higher Tuesday. This was supported by the rising crude oil price and uncertainty over Midwest crop weather for the coming weeks. Soyoil prices also eased after a two-day sharp rally linked to stronger U.S. Biofuel Blending mandates.
Analysts said that CBOT wheat reached a new high after a slow start in the U.S. harvest of winter wheat allowed speculators cover their short positions. After wheat and crude oil futures, corn prices were mostly higher. However, the front-month contract for July ended lower.
CBOT July soybeans ended up gaining 4-1/4 cents to $10.74 a bushel. July soyoil, however, was down 0.32cents at 54.79cents per pound. July wheat ended up 12-1/2 cents per bushel at $5.49.
CBOT July Corn closed down 3-1/4 Cents at $4.31-1/4 per bushel. New-crop corn for December ended up 3-3/4 Cents at $4.38-1/4 per bushel.
The strength of the energy markets supported soybeans and corn, due to their role in biofuel production. U.S. crude prices rose 4%, despite the fact that there is no end to the conflict between Israel and Iran. However, major oil and natural gas infrastructure has been spared.
Marex's senior agricultural strategist, Terry Reilly, said that the Middle East situation continues to disrupt markets outside of our borders, and this spills over into Marex markets.
The U.S. Department of Agriculture boosted soy futures after it rated 66% of U.S. soybeans as good-to excellent, down from last week's 68%, and corn ratings increased to 72%, an increase of 1 percentage point. Analysts noted that summer weather has become increasingly important for crop prospects.
Don Roose of U.S. Commodities in Iowa said, "We have removed enough risk premium for this time of the year until we can get a better view of the weather after the Fourth of July." Wheat futures rose, boosted in part by USDA's report stating that winter wheat harvest is 10% complete, compared to the 5-year average of 16 %.
The wheat market is bouncing because of the late harvest and the too-wet weather conditions. Roose noted that many commodity funds have a net-short position in the CBOT Wheat Futures. This leaves the market vulnerable to rallies for short-covering.
The French Farm Ministry forecast on Tuesday a significant rebound in the production of winter barley and Rapeseed for 2025, following the rain-damaged crops from last season. Reporting by Julie Ingwersen, with additional reporting from Ella Cao in Beijing and Lewis Jackson in Paris. Editing by Rod Nickel & Nigel Williams.
(source: Reuters)
