U.S. corn futures surged on Friday to their highest level since late January, though they later eased back. Soybean prices also hit a one-month high as floods in Brazil and disease in Argentina disrupted harvests.
Analysts noted that Brazil’s heavy rains affected the final stages of the soybean and corn harvests in Rio Grande do Sul, Brazil’s second-largest soybean producer and sixth-largest corn producer.
In Argentina, the spread of corn stunt disease, exacerbated by adverse weather and leaf-cutter insects, led the Buenos Aires grains exchange to cut its 2023/24 corn harvest estimate by 3 million metric tons to 46.5 million tons. Labor strikes in Argentina, particularly affecting grain ports, added to the market uncertainties.
Wheat futures rose to a one-week high due to concerns over dry weather in Russia and reduced crop forecasts.Chicago Board of Trade (CBOT) July corn futures settled at $4.60-1/4 per bushel, after peaking at $4.68, the highest since January 26. CBOT July soybeans ended at $12.15 per bushel, up 16 cents, and July wheat increased by 18-1/4 cents to $6.22-1/2 per bushel.
Wheat futures also reached a one-week high due to renewed concerns over dry weather in Russia, the world’s leading wheat supplier.
IKAR, a Russian agricultural consultancy, reduced its wheat crop forecast to 91 million metric tons from 93 million, and its export projection to 50.5 million metric tons from 52 million. Wheat futures jumped on forecasts of minimal rain in the coming two weeks.
The weaker U.S. dollar and Russia’s weather concerns prompted increased buying, as noted by Mike Zuzolo of Global Commodity Analytics.
He remarked that the current market dynamics, with disrupted supplies from South America and changing economic conditions, are shifting previously held positions in the market.