Chicago | Reuters – Chicago Board of Trade corn futures rose 1.3 per cent on Wednesday as uncertainty about crop prospects in South America and a setback in the dollar triggered a round of short-covering and lifted the benchmark corn contract Cv1 from three-year lows set last week, traders said.
CBOT wheat futures ended up 2.4 per cent on technical buying and weakness in the dollar, while soybeans ended narrowly mixed after a choppy session.
CBOT March corn CH24 settled up 5-3/4 cents at $4.52-1/2 per bushel, extending its rebound after a drop last week to $4.36-3/4, the lowest on a continuous chart of the most-active contract Cv1 since December 2020.
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CBOT March wheat WH24 finished 14-1/4 cents higher on the day at $6.10-3/4 a bushel. March soybeans SH24 settled up 3/4 cent at $12.40-1/4 a bushel, paring gains after reaching $12.46, its highest since Jan. 12.
Energy markets lent support, with crude oil CLc1 up about 1 per cent on bigger-than-expected U.S. crude storage withdrawal. Corn and soybeans sometimes follow trends in crude oil due to their use in biofuels.
Commodity funds hold sizeable net short positions in CBOT corn, wheat and soybean futures, leaving all three markets primed for short-covering rallies. Corn Cv1 hit a three-year low last week and soybeans Sv1 touched a two-year low.
Meanwhile, stressful heat is forecast for crop areas of Argentina, which has been on course for a bumper harvest, and market players continue to debate the size of Brazil’s developing corn and soy crops.
“It’s an unknown as to Brazilian crop size, and Argentina has their first hot and dry run of the season coming up,” said Tom Fritz, a partner with EFG Group in Chicago. “You couple that with all the shorts in the market, and it’s like, ‘OK, let’s take the dough.'”
Forecasters expect lower production from Brazil’s second corn crop, reflecting a smaller planted area.
In wheat, Russia’s Sovecon agricultural consultancy raised its forecast of the country’s 2024 wheat crop to 92.2 million tons, from 91.3 million in December, and now not far from the 92.8 million tons harvested in 2023.
–Additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.
