Corn futures ride demand higher Wednesday
Corn futures rose for a second day on signs of strong demand for U.S. supplies from overseas buyers, and as snowfall in parts of the Midwest slows movement of grain off the farm. Soybeans dropped to a fresh two-month low and wheat declined.
The U.S. Department of Agriculture said in a report on Tuesday that it inspected 29.8 million bushels of corn for overseas delivery in the week that ended Jan. 16. That's up from 20.9 million bushels the prior week and topped analysts' expectations for 20 million to 28 million bushels. Exporters sold 105,664 metric tons of corn to Japan for delivery in the year that starts on Sept. 1, the USDA said in a report on Wednesday.
Heavy snow fell in parts of Iowa and Illinois, the largest corn producers in the U.S., on Monday, which has slowed travel to elevators, ethanol plants and livestock feedlots, improving cash prices.
"The cattle and hog and ethanol guys are trying to price corn right now," said Jamey Kohake, a commodities broker at Paragon Investments in Silver Lake, Kan. "Not a lot of farmers are selling right now."
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Chicago Board of Trade corn futures for March delivery rose 1 1/4 cents, or 0.3%, to $4.26 1/4 a bushel.
Soybeans declined to a fresh two-month low in Chicago as the harvest continues in Brazil, worrying investors who believe China will buy supplies from the South American country and cancel purchases from the U.S., Mr. Kohake said.
"Brazil has a bumper crop, just waiting to see if Argentina" will also have increased production, he said. "Soybean supplies are tight domestically so that's helping."
Soybean futures for March delivery fell 1 cent, or 0.08%, to $12.79 1/2 a bushel in Chicago trading, the lowest closing price for a front-month contract since Nov. 20.
Wheat fell to a new three-year low on speculation that global production will rise as Canada produces a record crop and Australian output is forecast to be the third-largest ever. While Egypt is seeking wheat, investors are betting the North African country will purchase grain from exporters with ports on the Black Sea including Russia and Ukraine. Despite wheat being technically oversold, investors are shying away from the grain.
"Wheat really can't get a bid in the market," Mr. Kohake said. "The funds are all short right now and there's no reason to get out."
Wheat futures for March delivery fell 1 cent, or 0.2%, to $5.61 1/4 a bushel in Chicago trading, the lowest closing price for a front-month contract since July 14, 2010.