Chicago | Reuters — Chicago Board of Trade corn futures reached a one-month high on Friday as forecasts for dry weather in the U.S. Midwest kept attention on early risks to this year’s crop.
Soybean and wheat futures also rose, with the agricultural markets posting weekly gains following recent declines to multi-month lows.
Traders added a weather risk premium to the markets ahead of the three-day holiday weekend, with conditions looking “quite dry” in the Corn Belt, said Arlan Suderman, chief commodities economist for broker StoneX. CBOT will be closed on Monday for Memorial Day in the U.S.
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On Tuesday, the U.S. Department of Agriculture is expected to issue a weekly update on corn and soybean planting progress and its first condition ratings of the season for the corn crop. The government has projected supplies of both crops will rise sharply in the coming year due to forecasts for record harvests.
However, below-normal rainfall is expected to continue across the Midwest, eastern Plains and Delta over the next 15 days, forecaster Maxar said. The conditions will allow dryness to worsen and expand further, increasing stress on corn and soybeans, the firm said.
Stress from dryness will affect about 40 per cent of the corn crop come early June, according to Commodity Weather Group.
The most-active corn contract ended 13-1/4 cents higher at $6.04 a bushel and touched its highest price since April 26 at $6.06-3/4. Soybeans rose 3-1/4 cents to settle at $13.37-1/4 a bushel, while wheat jumped 11-3/4 cents to end at $6.16 a bushel.
Hopes that the Biden administration and Republicans in Congress will reach an agreement to raise the government’s debt ceiling helped support gains in commodity and equity markets, traders said.
The U.S. dollar was set for a third straight weekly gain amid the closely watched talks on the debt ceiling. A strong U.S. dollar is generally seen as bearish for U.S. grain futures.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
