Corn and soybean futures on the Chicago Board of Trade (CBOT) saw slight increases on Wednesday, continuing to hover near multi-month highs as investors closely monitored weather forecasts in Argentina and anticipated upcoming U.S. inflation data that could influence future interest rate decisions.
The most active corn contract rose by 0.4%, reaching $4.76-1/2 per bushel as of 11:46 GMT. This marked its highest point since December 2023, although it slightly retraced earlier gains. Soybean futures saw a 0.3% uptick, trading at $10.50-1/2 per bushel, maintaining levels unseen since early October before experiencing a modest pullback alongside corn.
Wheat prices, however, experienced a slight decline of 0.3%, settling at $5.44-3/4 per bushel after touching their highest levels in over a week on Tuesday. The retreat in wheat prices followed a two-day rally, which had been fueled by growing competition in the market amid lackluster export demand.
Surprise USDA Revision Boosts Corn and Soybean Prices
The U.S. Department of Agriculture’s recent report, released on Friday, provided a bullish surprise for corn and soybean markets, as it lowered its forecasts for U.S. 2024 crop production and end-of-season stocks. The revised estimates, which showed a larger-than-expected reduction in crop yields, added further upward momentum, particularly for corn and soybeans, already impacted by adverse weather conditions in Argentina.
Despite the market’s initial enthusiasm, the rally was tempered by farmer selling, which brought some price stabilization in Chicago. Traders are now focused on weather forecasts, particularly the potential for much-needed rain in central Argentina, which has been grappling with an intense heatwave.
Focus Shifts to Argentina’s Weather and Brazil’s Harvest
Analysts, including those at Argus, are watching closely for rain in Argentina next weekend, which could help alleviate concerns about crop damage from the ongoing heatwave. However, there are additional factors influencing the soybean market. The onset of Brazil’s record-breaking harvest is expected to keep a lid on soybean prices, despite the tightening global supply.
Dennis Voznesenski, an analyst at Commonwealth Bank, explained that the dynamics of global stocks for corn and soybeans are markedly different. “Soybean ending stocks continue to rise, and despite USDA revisions, they are expected to reach their highest level ever. On the other hand, corn stocks are projected to be the lowest since 2020,” Voznesenski said.
As global weather patterns and crop yields continue to shift, market participants remain cautious but attentive to the evolving conditions, which will likely determine price trajectories in the coming weeks.
