Chicago | Reuters – U.S. corn futures rose above $5 a bushel on Thursday to their highest level since August, while soybean futures hit a four-week high.
The increases came as farmers were in the middle of harvesting their crops, a time when the influx of fresh supplies typically puts pressure on prices.
A severe drought that is disrupting grain shipments and slowing soy production in rival exporter Brazil has helped drive markets higher, analysts said. They said gains in crude oil prices and weakness in the US dollar also set a positive tone for grain futures.
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Nevertheless, forecasts of large US corn deliveries could limit further increases. By the time farmers finish harvesting and deliver all the grain, the U.S. government says they will have more corn in storage than the amount that has been sitting in U.S. silos for seven years.
“With a loss of more than 2 billion bushels, I wonder how far we can really go,” said Tomm Pfitzenmaier, an analyst at Summit Commodity Brokerage in Iowa.
The most active corn futures on the Chicago Board of Trade rose 13 cents to close at $5.05 a bushel, hitting their highest price since Aug. 21 at $5.05-1/2 a bushel.
Technical selling supported gains, traders said.
“As soon as you got above $5, that triggered a whole series of stops,” Pfitzenmaier said.
CBOT wheat was down 13-3/4 cents at $5.94 a bushel, hitting a three-week high of $5.94-1/2.
CBOT soybeans were down 4-1/2 cents at $13.15-1/2 a bushel, after hitting their highest price since Sept. 21 at $13.17-3/4. A rally to July highs in soymeal futures helped support soybeans, traders said.
“The food has gone to shit here,” said Matt Wiegand, commodities broker at FuturesOne.
Weekly U.S. export sales of soybeans, corn and wheat for 2023-24 were in line with analyst estimates. Difficult logistics in Brazil could create an opportunity for improved U.S. corn exports in the near term, a broker said.
– Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris.
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