Corn, soybeans firm as US crop conditions decline; recession fears weigh

Corn, soybeans firm as US crop conditions decline; recession fears weigh
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SINGAPORE (July 6): Chicago corn and soybean futures ticked higher on Wednesday (July 6), with both markets recovering from multi-month lows reached in the previous session, although concerns over a global recession limited gains.

Wheat rose for the first time in four sessions.

Fundamentals

The most-active corn contract on the Chicago Board of Trade (CBOT) had risen 0.5% to US$5.81 (about RM25.71)-1/4 a bushel as of 0015 GMT and soybeans added 0.8% to 13.27-1/2 a bushel. Both markets dropped to their lowest since December in the last session.

Wheat rose 0.8% to US$8.13-1/2 a bushel.

After the CBOT closed on Tuesday, the US Department of Agriculture (USDA) said weekly US crop ratings declined more than analysts expected.

The USDA rated 64% of the corn crop as good to excellent as of Sunday, down three percentage points from the previous week, while analysts surveyed by Reuters on average had expected a two-point decline. 

The agency rated 63% of the soybean crop as good to excellent, down from 65% a week earlier. Analysts on average had expected a one-point decline.

However, beneficial rains in portions of the US Midwest over the Independence Day weekend bolstered crop prospects.

Elsewhere, Russian wheat export prices fell last week due to pressure from the new crop, which farmers have just started harvesting, a reduced export tax and a decline in Chicago prices, analysts said on Monday.

Sanctions-hit Russia reduced its grain export taxes sharply last week to support shipments in the July-June marketing season.

Prices of the new wheat crop with 12.5% protein content and for supply from Black Sea ports fell US$25 to US$375 per tonne free on board at the end of last week, the IKAR agriculture consultancy said.

In Canada, farmers planted the most wheat this spring in nine years as bottlenecks in global supplies drove up prices of grain and food, a government report showed on Tuesday.

Brazilian farmers have harvested nearly a third of their second corn in centre south fields as dry weather and the higher temperatures that prevailed last week continued to favour the work, especially in top grower Mato Grosso. 

According to agribusiness consultancy AgRural on Monday, farmers harvested 30.7% of second corn fields so far in the season or nearly 25 million tonnes.

Large speculators cut their net long position in CBOT corn futures in the week to June 28, regulatory data released last Friday showed. 

The Commodity Futures Trading Commission's weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and cut their net long position in soybeans.

Market news

The euro sank to its weakest level against the dollar in almost 20 years on Tuesday, while oil futures tumbled and bond prices rose as investors sought safety after the latest data fuelled fears of a global economic slowdown.