Chicago grains higher after crop ratings decline
By Gus Trompiz and Naveen Thukral
PARIS/SINGAPORE, Aug 9 (Reuters) - Chicago corn, wheat and soybean futures rose on Tuesday after reduced U.S. crop ratings in a weekly government report put attention back on weather risks. The decline in growing conditions, together with a weaker dollar, helped offset pressure from a resumption in sea exports from Ukraine under a wartime corridor agreement.
The most-active corn contract on the Chicago Board of Trade (CBOT) was up 2.2% at $6.20-1/2 a bushel by 1009 GMT.
CBOT soybeans added 1.5% to $14.21-1/2 a bushel while CBOT wheat rose 2.1% to $7.96-1/4 a bushel.
"U.S. grain futures led by corn trade higher today in response to worsening crop conditions," Ole Hansen, head of commodity strategy at SaxoBank, said. "Just like central Europe, searing heat and drought have raised concerns about lower production and yields."
In its weekly update released after Monday's market close, the U.S. Department of Agriculture (USDA) lowered its crop ratings in a sign that hot, dry weather in some growing belts was affecting plants. Corn was rated 58% good-to-excellent, compared with 61% a week ago and below an average analyst estimate of 60%.
A bigger surprise was in spring wheat, for which the USDA cut its good/excellent score to 64% from 70%, whereas analysts had on average expected no change.
For soybeans, the agency trimmed its good-to-excellent score by 1 percentage point to 59%, in line with expectations. The ratings decline put the focus on hot, dry weather that is set to continue this week in part of the U.S. Midwest, although conditions remained favourable in some key zones. Weather concerns are also being fuelled by drought across Europe, which is threatening to cut sharply corn yields.
Traders are awaiting monthly USDA production forecasts on Friday to gauge the impact of summer weather on yield prospects. The resumption of maritime grain shipments from Ukraine has eased some concerns over tight world supplies linked to Russia's invasion of its neighbour and fellow grain exporter.
Ships exporting Ukraine grain through the Black Sea will be protected by a 10 nautical mile buffer zone, according to long-awaited procedures agreed by Russia, Ukraine, Turkey and the United Nations on Monday and seen by Reuters.
Prices at 1009 GMT Last Change Pct End Ytd Pct Move 2021 Move
CBOT wheat 796.25 16.50 2.12 770.75 3.31
CBOT corn 620.50 13.25 2.18 593.25 4.59
CBOT soy 1421.50 21.50 1.54 1339.25 6.14
Paris wheat 342.00 1.00 0.29 276.75 23.58
Paris maize 330.00 3.00 0.92 226.00 46.02
Paris rape 659.75 4.00 0.61 754.00 -12.50 WTI crude oil 90.07 -0.69 -0.76 75.21 19.76 Euro/dlr 1.02 0.00 0.38 1.1368 -9.98
Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne
(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)
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