Market News

Corn higher on commercial support, crop concerns

Soybeans were higher on speculative and commercial buying, along with spillover from corn and wheat. There’s been some excellent rainfall in parts of South America with more potentially on the way later this week. Still, the crop will have to see a sustained weather change in order for it to be completely out of the woods. According to Dow Jones Newswires, some of Argentina’s key growing areas should see a return to hot, dry conditions this weekend or early next week. Soybean products were mixed with meal up and oil down on spread adjustments.

Corn was higher on short covering and commercial buying. That rainfall in South America will help part of their corn crop but at least some is too damaged to save. The U.N.’s Good and Agriculture Organization, via Dow Jones Newswires, pegs the crop at 21.4 million tons, down 7% from 2011 but the FAO does expect exports to be up sharply thanks in part to last year’s carryover. Also according to the FAO, Mexico could import up to 15.4 million tons of corn, up 6% on the year, due to inclement weather damaging the domestic crop. Past that – the dollar turned mostly lower and the cash basis has been firm to higher recently even with gains in the futures. Ethanol futures were higher. USDA’s Agricultural Attaché for Jordan projects 2011/12 corn imports to be up from 2010/11, taking some of barley’s market share.

The wheat complex was higher on short covering, technical buying, and the mostly lower dollar. There’s been at least some damage to Argentina’s wheat crop, Russia may impose an export tax, and there are concerns about the U.S. hard red winter crop. However, the overall fundamentals remain bearish, especially on the global supply side of the balance sheet. European wheat was higher on the South American crop woes.