Forexpros – Corn futures rose for the third consecutive day on Tuesday, hovering just below the previous session’s three-week high as a combination of ongoing concerns over dry weather conditions in Argentina and a broadly weaker U.S. dollar boosted prices.
On the Chicago Mercantile Exchange, corn futures for March delivery traded at USD6.0338 a bushel during European morning trade, gaining 0.46%.
It earlier rose by as much as 0.55% to trade at a daily high of USD6.0362 a bushel, just below Monday’s three-week high of USD6.0375 a bushel.
Corn prices were boosted after agricultural meteorologists said that hot and dry weather conditions were expected to linger across major corn-growing areas in Argentina.
The dry weather conditions were likely to reduce soil moisture, potentially threatening yields and weighing on the quality of the harvest.
Argentina is the world’s second largest corn shipper. Crop losses in the South American country could potentially increase demand for U.S. supplies, which is both the world’s largest corn producing nation and the world’s largest exporter of the grain.
Investors also are monitoring the corn crop in Brazil, the world’s third largest corn exporter. Industry weather group Telvent DTN said last week that nearly 40% of corn-growing areas in Brazil have been drier-than-normal since November 15.
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.
Weakness in the U.S. dollar also provided support. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.7% to trade at 80.38.
A weaker dollar boosts the appeal of U.S. crops to overseas buyers and makes commodities more attractive as an alternative investment.
Meanwhile, commodity prices received a lift as risk appetite staged a recovery after unexpectedly strong German business confidence data and after Spain saw borrowing costs fall sharply at an auction of three and six-month government bonds.
Elsewhere on the Chicago Mercantile Exchange, wheat for March delivery rose 0.5% to trade at USD6.0188 a bushel, while soybeans for January delivery added 0.4% to trade at USD11.4175 a bushel.
Forexpros
