Grain prices in Chicago corn and soy recover after updated biofuel guidance
Analysts said that Chicago grain and soybean contracts gained ground on Tuesday, as the selloff of commodities markets subsided?and the U.S. Department of the Treasury issued updated guidance?on biofuel credit credits.
As of 11 am CT (1600 GMT), the most active soybean "contract" on the Chicago Board of Trade recovered from a three session fall. CBOT Wheat was down 2 cents at $5.25-3/4 per bushel, and CBOT Corn was up 1-3/4 Cents at $4.27-1/2.
Market players are still analyzing the Treasury's updated guidance regarding the 45Z Clean Fuel Production Tax Credit, which clarifies that only feedstocks produced in the U.S.A., Mexico?and Canada?qualify for the tax credit.
Treasury's 45Z guidance released this morning has been a major factor in the release of support. Dan Basse said that the 45Z guidance provided a lot of clarity and added value for biofuel producers.
Traders said that biofuels were a major demand source for soyoil. Corn futures also rose as corn is used to make ethanol, a major biofuel.
The selloff in commodities on Monday was fueled by a deescalation in tensions between Iran and the U.S., and by the rising dollar. The broader commodity markets have stabilised, particularly crude oil. This has helped support grains and soybeans.
The market is still dominated by a large global supply.
Brazil, in South America is currently harvesting what has been?predicted to be a record-breaking soybean crop.
On Monday, brokers StoneX and Celeres increased their forecasts of Brazil's soybean crop for 2025/26. They cited higher yields as the reason.
Concerns about crop damage from cold weather in the U.S.A. and Black Sea region were lessened for?wheat.
(source: Reuters)
