U.S. grains rallied on Tuesday, with corn and soybeans each gaining more than one per cent and rebounding from steep losses on tight supply concerns ahead of a government crop report due on Wednesday.
Wheat futures also rose for the first time in five sessions, as Japan announced its first feed wheat tender following the discovery of an unapproved genetically modified strain last month in the U.S. state of Oregon.
A downturn in the dollar also supported grain futures as a weaker greenback could entice importers to buy cargoes from the United States. Soymeal futures gained 3.5 per cent for their biggest gains since February.
“Traders are getting back into bull spreads after they (exited) the last several days,” said Terry Reilly, grains analyst at brokerage Futures International in Chicago.
Analysts expect the U.S. Agriculture Department in a monthly supply and demand report on Wednesday to renew forecasts for domestic supplies of corn and soybeans to shrink to the lowest levels in 16 years by the end of the summer.
Expectations that USDA will decrease corn acreage in a rare move for a June crop report also lifted futures, but forecasts for near ideal growing conditions in the coming days capped gains in new-crop corn and soy contracts.
Tight supplies and anticipation of a larger stockpile at harvest have seen spot contracts rising on deferred, or new-crop, contracts at the Chicago Board of Trade.
CBOT July corn finished 9-1/2 cents higher at $6.59-1/2 cents per bushel, a gain of 1.5 per cent after falling two per cent on Monday. New crop December corn settled up 4-3/4 cents at $5.50-3/4 (all figures US$).
CBOT July wheat was up seven cents to $6.96-3/4.
“The corn got beat up pretty good yesterday, and right in front of a report. I think you’re getting a few shorts bailing and along with that a softer dollar is naturally beneficial,” said Sterling Smith, futures specialist with Citigroup.
Soybeans for July delivery gained 28-3/4 cents, or 1.9 per cent, to $15.40-1/2 per bushel, the highest closing price on a continuous chart since Nov. 2. New-crop November beans climbed eight cents to $13.27.
“I think there is a realization that getting enough beans to last to harvest will be tough,” A/C Trading president Jim Gerlach said of the strength in the soy complex.
Cash bids for soybeans have climbed in recent days, bolstered by slow selling by farmers and commercial elevators.
“Anybody still holding beans has held them through massive inversions, massive basis, strong cash price. The people still holding beans are not needing the cash flow right now.”
USDA late on Monday said U.S. corn plantings were nearly complete even as soybean planting progress was the slowest in 17 years due to rainfall this spring in the U.S. Midwest.
However, conditions next week should benefit the newly planted crops, said Don Keeney, meteorologist for MDA Weather Services.
“It will turn warmer next week, which will add some heat units which will be good for crops.”
— Michael Hirtzer reports on ag commodities for Reuters in Chicago. Additional reporting for Reuters by Julie Ingwersen, Sam Nelson and Karl Plume in Chicago, Ivana Sekularac in Amsterdam, and Naveen Thukral in Singapore.