Chicago | Reuters — U.S. corn futures rebounded on Tuesday from four-month lows struck in the previous session after the U.S. Department of Agriculture said the U.S. crop’s condition unexpectedly declined over the past week.
Soybeans followed corn higher despite steady crop condition ratings, as worries about lower yields in the late-developing crop underpinned prices.
Wheat gained on spillover support from higher corn and soy, and on concerns that dryness in some Southern Hemisphere wheat areas could clip yields in Australia and Argentina.
Grain traders also squared positions ahead of an eagerly awaited monthly crop supply and demand report, due to be issued by USDA on Thursday. The agency is expected to lower its corn and soybean crop outlooks following higher-than-anticipated production forecasts last month.
Corn gains were propelled largely by USDA’s lower-than-expected crop condition rating in a weekly report late on Monday.
“The USDA crop conditions report that came out yesterday showed some deterioration in the corn ratings week to week. That’s the main thing supporting the market today,” said Brian Basting, analyst with Advance Trading.
“There’s also some short-covering ahead of Thursday’s supply/demand report after the contract lows we hit recently,” he said.
The crop condition report showed that 55 per cent of the U.S. corn crop was in good-to-excellent shape, down from 58 per cent last week and below market forecasts also for 58 per cent.
USDA also said 55 per cent of the U.S. soybean crop was in good-to-excellent condition, matching analysts’ forecasts and unchanged from last week.
Recent price declines have sparked renewed buying interest by some importers such as Mexico and South Korea.
USDA on Tuesday reported private sales of corn, soybeans and soymeal to Mexico, a day after confirming large sales of corn to the key U.S. grain importing country.
Chicago Board of Trade December corn settled up 7-1/4 cents at $3.61-1/2 a bushel, while November soybeans were up 14-1/4 cents at $8.72 a bushel (all figures US$).
CBOT December wheat rose 7-3/4 cents to $4.82-1/4 a bushel, extending gains on Monday that were the strongest in two months.
Australia on Tuesday trimmed its wheat production forecast for the 2019-20 season by nearly 10 per cent as prolonged dry weather across the country’s east coast wilts production.
Argentina’s wheat crop could also be damaged by dry conditions.
— Reporting for Reuters by Karl Plume in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.