Sign in Subscribe
Commodity futures

Corn and Soybean Futures Rise Amid Dry Midwest Conditions

Strategic Insights

— 2 min read

Grain markets in Chicago continued to adjust to changing weather patterns in the eastern US Midwest on Tuesday, with corn futures edging higher and soybean futures posting strong gains despite easing back from earlier highs. The dominant theme of the day, as it has been for weeks, was the impact of dry conditions on crops, with traders weighing the risks of potential yield losses against the uncertainty of weather forecasts. The US Department of Agriculture's (USDA) crop progress report, expected to be released later in the day, was a key factor in market sentiment, with traders anxious about a potential decline in crop ratings.

Key Takeaways:

  • Corn futures at the Chicago Board of Trade (CBOT) settled 3/4 cents higher at $2.22 per bushel, with September corn finishing 1 1/4 cents higher at $2.30 3/4, and December ending 1/2 cent higher at $2.39 1/4 per bushel.
  • Soybean futures posted strong gains, with July soybeans ending 12 1/2 cents higher at $6.80 1/4 a bushel, and July soymeal settling $6.00 higher at $214.70 a short ton.
  • Weather remained the dominant factor in market sentiment, with dry conditions in the eastern Midwest producing volatile action and limiting precipitation forecasts.
  • The USDA's crop progress report, expected to show a 2-4 percentage point decline in crop ratings, was a key factor in market sentiment.
  • CBOT wheat futures settled mostly lower on Tuesday, with July wheat ending down 3 1/4 cents at $3.31 3/4 per bushel after setting a two-month high of $3.42 3/4.
  • US wheat traders expected the USDA to report a stabilization of winter wheat crop conditions after a month-long decline due to drought, freeze damage, and crop diseases.
  • The USDA reported the US winter wheat crop was 52% in good to excellent condition, well above last year's 44% for the same period.

Statistics:

  • CBOT July corn futures settled 3/4 cents higher at $2.22 per bushel.
  • July soybeans ended 12 1/2 cents higher at $6.80 1/4 a bushel.
  • July soymeal settled $6.00 higher at $214.70 a short ton.
  • The USDA reported 52% of the US winter wheat crop was in good to excellent condition, compared to 44% last year for the same period.
  • CBOT July wheat settled down 3 1/4 cents at $3.31 3/4 per bushel.

Sources:

  • Dow Jones Commodities News via Comtex, Chicago, May 31, 2005.
  • Susan Schwendener, Dow Jones Newswires, 312-341-5780, sue.schwendener@dowjones.com.

Read more