Forexpros – Last week saw U.S. grain futures rally to multi-week highs as adverse weather in Argentina and Brazil underlined concerns over crop conditions in the South American countries, boosting hopes for a lift in overseas demand for U.S. supplies.
Soybeans extended their streak of gains to six days, the longest such string in five months, while corn and wheat stretched their rallies to five days.
The late-year rally has pared what are shaping up to be losses across 2011 for all three, with soybeans on course for a 17% drop, wheat heading for a 22% plunge and corn on pace for a 2% decline.
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.
On the Chicago Mercantile Exchange, corn futures for March delivery traded at USD6.2012 per bushel by close of trade on Friday, rallying 5.44% over the week.
Corn prices rose to USD6.2487 a bushel on Thursday, the highest since November 17 after the U.S. Department of Agriculture said that corn exports inspected at U.S. ports in the week ended December 15 totaled 952,900 metric tons, blowing past expectations for 650,000 tonnes.
Corn futures remained supported after agricultural meteorologists said that hot and dry weather conditions were expected to linger across major corn-growing areas in Argentina, the world’s second largest shipper of the grain.
The dry weather conditions were likely to reduce soil moisture, potentially threatening yields and weighing on the quality of the harvest.
Meanwhile, soybeans for January delivery gained 2.98% on the week to settle at USD11.7238 a bushel by close of trade Friday, the highest since November 21.
Soybean prices have gained in nine of the past ten trading sessions, climbing nearly 6% amid ongoing concerns over dry weather conditions in Brazil, the world’s second largest soy exporter.
According to the USDA, total soybean exports inspected at U.S. ports last week came in at 728,400 tonnes, beating expectations of 600,000 tonnes.
The world’s largest soy consumer China purchased nearly 189,000 tonnes of the grain from U.S. farmers last week.
Soybean prices drew additional support from expectations for a near-term increase in demand from China after the nation’s Ministry of Commerce said that the country could import as much as 6.1 million metric tons of the oilseed in December, the most in 18 months.
Elsewhere on the Chicago Board of Trade, wheat for March delivery surged 5.77% over the week to settle at USD6.2175 a bushel on Friday. Earlier in the day, prices rose to USD6.2762 a bushel, the highest since November 16.
The USDA said that wheat exports inspected at U.S. ports last week came in at 362,300 tonnes, up 12% from a week earlier, reflecting good export demand for top quality U.S. wheat.
Wheat futures continued to draw support amid expectations of poor quality production in Australia, the world’s fourth largest exporter.
Corn is the biggest U.S. crop, valued at USD66.7 billion in 2010, followed by soybeans at USD38.9 billion, government figures show. Wheat was fourth at USD13 billion, behind hay.
Trading volumes were expected to remain light in the week ahead, as market participants tend to move to the sidelines and take time off during the last week of December.
Forexpros
