Forexpros – Corn futures regained strength on Thursday, bouncing off the previous session’s one-month low as a broadly weaker U.S. dollar boosted the grain’s appeal to overseas buyers, while traders continued to monitor weather forecasts in Argentina, the world’s second largest exporter.
On the Chicago Mercantile Exchange, corn futures for March delivery traded at USD5.9738 a bushel during European morning trade, gaining 0.53%.
It earlier rose by as much as 0.77% to trade at a session high USD5.9850 a bushel. Prices fell to USD5.9287 a bushel on Wednesday, the lowest since December 19.
Corn prices came under pressure on Wednesday, tumbling nearly 2.1% to hit the lowest level since mid-December after short-term weather forecasts called for rain in key corn-growing regions in Argentina during the coming days.
Indications that the La Nina weather pattern, which has been blamed for the extremely dry weather conditions in South America in recent weeks, was weakening also weighed.
However, prices regained strength as agricultural traders speculated if the rainfall was sufficient enough to boost yields from stressed crops.
Traders have been focusing on weather conditions and crop prospects in Southern Hemisphere countries in recent weeks, as most Northern Hemisphere grain crops have been harvested by now.
Argentina is the world’s fifth largest corn producer and second biggest exporter of the grain.
A smaller crop outlook there would likely mean greater demand for U.S. supplies, which is both the world’s largest corn producer and exporter.
Weakness in the U.S. dollar also provided support. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, retreated 0.26% to trade at 80.47.
Demand for riskier assets improved after auctions of Spanish and French government encountered solid investor demand.
Bond auctions have become key drivers of risk sentiment in recent months, as traders attempt to gauge the ability of indebted euro zone nations to fund themselves.
Elsewhere on the Chicago Mercantile Exchange, wheat for March delivery climbed 0.73% to trade at USD5.9650 a bushel, while soybeans for March delivery rose 0.61% to trade at USD11.9138 a bushel.
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