Grain prices are up, with wheat and corn both rising.
Chicago Board of Trade soybeans futures rose on Tuesday due to rising crude oil and the uncertainty surrounding Midwest crop weather for the coming weeks. Soyoil prices fell after a two-day sharp rally linked to increased U.S. Biofuel Blending mandates.
Analysts said that CBOT wheat reached a new high in a week as the slow start of U.S. winter harvest wheat allowed speculators cover their short positions. Analysts said that corn futures rose mainly after wheat and crude oil. However, the front-month contract for July was under pressure.
As of 1:11 p.m. CST (1811 GMT), July soybeans on the CBOT were up 3-1/2 cents to $10.73 a bushel. July soyoil, however, was down 0.31 percent at 54.80 cents a pound. Both prices are reversing their early gains. July wheat gained 12-1/2 cents to $5.49 per bushel.
CBOT July Corn was down 2-1/4 cents to $4.32 per bushel. However, new-crop corn for December was up 4 Cents to $4.39 per bushel. Energy markets were strong, which helped corn and soybeans due to their role in biofuel production. The U.S. crude prices rose 3.5%, despite the fact that there is no end to the Iran-Israel conflict. However, major oil and gas flows and infrastructure have 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 is spilling into our own. The U.S. Department of Agriculture rated the U.S. Soybean crop on Monday as 66% good-to excellent, down from last week's 68%. Corn ratings also improved, 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 Independence."
Wheat futures jumped, supported by USDA report that winter wheat harvest is 10% completed, which is behind 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 on CBOT Wheat futures. This leaves the market vulnerable to rallies for short-covering. The French Farm Ministry forecast on Tuesday a strong recovery of winter barley and Rapeseed production in 2025 from the rain-damaged crops last year.
(source: Reuters)
