SINGAPORE, Jan 25 Chicago corn futures held near a one-month high on Monday as strong demand for U.S. supplies and a rally in oil prices underpinned the market, while wheat gained for a third consecutive session.
Soybeans also rose although gains were capped by forecasts of improved weather in Brazil, which is on track to produce a record crop.
Chicago Board of Trade most-active corn was unchanged at $3.70-1/4 a bushel by 0247 GMT, not far from last week’s one-month high of $3.72 a bushel.
Wheat climbed 0.3 percent to $4.77 a bushel and soybeans advanced 0.1 percent to $8.77-1/2 a bushel.
The U.S. Department of Agriculture said weekly export sales of corn for the 2015/16 marketing year totalled 1.158 million tonnes, the most in eight weeks. The USDA also said exporters booked another 189,000 tonnes of corn sales for shipment in 2016/17.
“Chicago March remains near recent highs. Higher oil prices generally see stronger demand for biofuels and so more corn leaks into ethanol,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
“Strong export data out of the U.S. also helped.”
Crude oil futures extended gains on Monday following a surge at the end of last week on short-covering and fuel demand triggered by freezing weather in parts of the northern hemisphere.
Meanwhile, Brazil’s agriculture minister said on Friday the country would auction 500,000 tonnes of maize corn from public stocks to help ease a recent spike in local prices.
Wheat is being supported by adverse weather in the Black Sea region. Forecasts for extreme cold in Russia and Ukraine in the coming days could stir weather concerns for wheat, although snow cover was expected to limit the risk of frost damage.
Russia’s grain exports in December hit a record high of 3.8 million tonnes, owing to a weak rouble making Russian grain more competitive on global dollar-denominated markets, said the SovEcon agriculture consultancy.
Soybean prices have risen on worries over excessive rains in Brazil but analysts said new forecasts show crop-friendly weather.
“Weather forecasters continue to look for a better Brazilian weather pattern this week with some rain in the south and some drying in the north,” said Gorey. “The markets’ worries about crops should mostly recede if these forecasts are realised.”
(Source – http://in.reuters.com/article/markets-grains-idINL3N1591HU)