Corn set for 2nd week of gains on strong demand, lower U.S. planting

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SINGAPORE — Chicago corn was little changed on Friday, with the market on track for its second week of gains, while soybeans are set for their biggest weekly rise in a month as expectations of higher plant-based fuel in the United States underpinned prices.

Grain and oilseed markets have scaled multi-year highs in recent weeks with strong demand led by China and lower-than-expected U.S. planting driving prices higher.

“There is talk about producing more edible oil based biofuels in the United States which is supporting prices,” said Phin Ziebell, agribusiness economist at National Australia Bank.

“On top of that there are issues with U.S. planting, the sentiment is pretty bullish.”

The most-active corn contract on the Chicago Board of Trade (CBOT) has gained 3.5% this week, adding to last week’s 1.3% rise. The market was trading little changed at $5.79-1/2 a bushel by 0325 GMT.

Soybeans are up 0.8% this week, their biggest gain since early-March, while wheat is up almost 3% after losing ground for the last five weeks.

U.S. President Joe Biden’s green fuel push using edible oils is helping drive up vegetable oil prices that are already near record highs.

World food prices rose for a 10th consecutive month in March, hitting their highest level since June 2014, led by jumps in vegetable oils, meat and dairy indices, the United Nations food agency said on Thursday.

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Export sales of 757,000 tonnes of old-crop corn were reported by the U.S. Department of Agriculture (USDA), down 5% from the week prior but in line with trade estimates.

The USDA will alter how it reports soybean oil use by biofuels producers beginning with its monthly World Agriculture Supply & Demand Estimates (WASDE) report in May, the agency announced on Thursday, confirming an earlier Reuters report.

Argentina’s 2020/21 soy crop is expected at 43 million tonnes, the Buenos Aires Grains Exchange said on Thursday, citing lower-than-expected yields caused by dry weather earlier this year as the reason for cutting its previous 44 million-tonne estimate.

Wheat rose as a cold spell this week in France, the European Union’s top wheat grower, brought record temperature lows for April, tempering recent optimism about harvest prospects.

Commodity funds were net buyers of CBOT corn, wheat, soybeans and soyoil futures contracts on Thursday and net sellers of soymeal futures, traders said. (Reporting by Naveen Thukral)