Chicago | Reuters — Chicago Board of Trade corn, soybean and wheat futures closed modestly higher on Friday as traders squared positions ahead of a three-day U.S. weekend and weighed contrasting crop prospects in South America, analysts said.
Uncertainty about the future of a Black Sea grain export corridor underpinned values, while a firming dollar and declines in crude oil prices capped rallies.
CBOT March soybeans settled up 3/4 cent at $15.27-1/4 per bushel and March corn ended up 1-3/4 cents at $6.77-3/4 a bushel (all figures US$). CBOT March wheat settled up 1/2 cent at $7.65-1/2 a bushel.
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Corn and soybean futures chopped around this week as traders shifted their focus from problems with drought-hit crops in Argentina to expectations of a record-large Brazilian soybean harvest.
“It creates a conversation: Is the Brazilian bean crop big enough to offset the losses in Argentina?” said Tom Fritz, a partner with EFG Group in Chicago.
Early strength in the U.S. dollar index hung over the grain markets, making U.S. grains less attractive globally, although the dollar later turned lower. The greenback drew support this week as investors upped their expectations for U.S. interest rates.
Similarly, crude oil futures fell on worries that interest rate hikes could weigh on demand. Corn and soybeans sometimes follow trends in crude oil futures given their respective roles as feedstocks for ethanol and biodiesel fuel.
Meanwhile, an escalation in fighting in eastern Ukraine and renewed Russian criticism of a wartime shipping corridor from Ukraine underpinned the wheat market. Negotiations will start in a week on extending the corridor agreement, a senior Ukrainian official said on Friday.
“You’ve got Black Sea anxiety. The anniversary of the Russian invasion is next Friday,” Fritz noted, adding that K.C. hard red winter wheat futures drew additional support from dry conditions in portions of the U.S. Plains winter wheat belt.
“If anybody wants to be long wheat, they want to be long K.C.,” Fritz said.
Traders await the U.S. Department of Agriculture’s annual Outlook Forum next week in which the government is expected to release preliminary forecasts for 2023 plantings and production of major U.S. crops.
U.S. markets and most government offices will be closed on Monday in observance of the Presidents Day holiday.
— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
