Forexpros – Corn futures rallied to for an eighth day on Wednesday, trading at the highest level since mid-November amid lingering concerns over dry weather conditions in South America and after an Italian bond auction showed a sharp drop in yields.
On the Chicago Mercantile Exchange, corn futures for March delivery traded at USD6.3612 a bushel during European morning trade, gaining 0.46%.
It earlier rose by as much as 0.55% to trade at USD6.3638 a bushel, the highest since November 17.
Trading volumes were expected to remain light following the Christmas break, as many traders have closed books before the end of the year, reducing liquidity in the market and increasing the volatility.
Corn prices have advanced for the past eight trading sessions, the longest streak of gains since December 2010, rallying nearly 9.5% as adverse weather conditions threaten crops in South America, boosting demand for U.S. supplies.
Traders have been focusing on crop prospects in Southern Hemisphere countries in recent sessions, as most Northern Hemisphere corn crops have been harvested by now.
South America is the main competition for U.S. exporters and a smaller crop outlook there would likely mean greater demand for U.S. grains.
The Commodity Weather Group said on Tuesday that nearly 50% of the crops in Argentina were expected to remain dry in the next ten days after weekend rain stayed north of the main corn-growing regions in Eastern Argentina.
The weather group added that as much as a third of Brazil’s crops face a lack of rain. Agricultural meteorologist T-Storm Weather said that most corn-growing regions in Southern Brazil have had less than half the normal rainfall since December 1.
The dry weather conditions were likely to reduce soil moisture, potentially threatening yields and weighing on the quality of the harvest.
Meanwhile, commodity prices received a lift as risk appetite staged a modest recovery after Italy saw borrowing costs fall sharply at an auction of short-term government debt earlier.
Despite the upbeat results, Thursday’s sale of EUR8.5 billion of long-term Italian debt maturing between 2014 and 2022 was seen as a bigger test of market confidence in the country’s sovereign debt.
Elsewhere on the Chicago Mercantile Exchange, wheat for March delivery rose 0.51% to trade at a seven-week high of USD6.4788 a bushel, while soybeans for March delivery shed 0.63% to trade at USD12.0100 a bushel.
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