Grain, Soybean Futures Bounce on Tougher Conditions
July 17 2018 - 2:15PM
Dow Jones News
By Benjamin Parkin
Grain and soybean futures rallied on Tuesday as hot Midwestern
weather took a toll on growing crops.
Corn futures for September delivery rose 1.3% to $3.46 1/4 a
bushel at the Chicago Board of Trade. August-dated soybean
contracts rose 1.2% to $8.39 1/2 a bushel, while September wheat
gained 1.9% to $4.97 3/4 a bushel.
The U.S. Department of Agriculture said on Monday after markets
closed that the quality of this year's growing corn and soybeans
deteriorated last week, after a bout of searing hot temperatures
stressed the crops.
The data was a sign that a months-long spell of near-impeccable
growing conditions seemed to be coming to an end.
"Crop ratings remain above average for this time of year, but
they are rapidly moving toward average," said Arlan Suderman, chief
commodities economist at INTL FCStone.
The USDA said 72% of corn was in good-or-excellent condition,
down 3% from a week earlier. The reduction, which was larger than
expected, was led by deterioration in states like Missouri and
Michigan. The share of soybeans rated good or excellent, meanwhile,
fell 2% to 69%.
The ratings helped spark buying interest when markets reopened,
as traders bet that production this season might not be as high as
previously expected. Given ongoing concerns about what trade
disputes with China, Mexico and others will do to demand, the
prospect of a bumper harvest later this year has pressured
prices.
Prices for corn and soybeans have fallen sharply in recent
weeks. As of last week, soybeans were down over 20% from late May,
trading at the lowest point in nearly 10 years, while corn had also
lost around a fifth over a similar period.
The wheat market has fared better recently, in part because
major producers like Russia have struggled with dry growing
conditions and a disappointing crop.
Mild temperatures and rains are due in the Midwest this week,
said the Commodity Weather Group, before that moisture shifts
south. The cooler and wetter weather is expected to relieve some of
the recent stress on this year's crops.
Write to Benjamin Parkin at benjamin.parkin@wsj.com
(END) Dow Jones Newswires
July 17, 2018 15:00 ET (19:00 GMT)
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