U.S. soybeans and corn extend rally on South America weather

US Materials 27 December 2021 14:53 (UTC +04:00)
U.S. soybeans and corn extend rally on South America weather

Chicago soybeans and corn extended gains on Monday to hit multi-month highs as unfavourable heat and dryness in South America stoked supply worries, Trend reports with reference to Reuters.

Wheat also rose, but dealers said many market participants were still absent after the Christmas break, meaning relatively small trades could provoke larger-than-usual price moves.

Chicago Board of Trade's most-active soybeans rose 0.7% to $13.51-1/4 a bushel by 1137 GMT, extending gains seen before Christmas and hitting their highest since mid-August.

Corn rose 0.9% to $6.11-1/4 a bushel, hitting its highest since late June. Wheat rose 0.2% to $8.16-3/4 a bushel, also continuing pre-Christmas strength.

Soybean and corn crop harvests are expected to be smaller in southern Brazil this season as fields are suffering from dryness, weather forecasters and consultancies said.

"The weather forecasts for the Brazilian and Argentine regions producing soybeans and corn are still looking very dry this week," one European trader said. "There is worry that a La Nina weather pattern could bring extended dryness which could stress crops."

Wheat was supported by expectations of more demand, with a long-awaited tender from Iraq issued just before Christmas and new tenders seen possible from other buyers.

"Iraq is seeking a nominal 50,000 tonnes but the country often buys more than the nominal volume sought," the trader added. "There are expectations that Egypt may issue a new wheat purchase tender, China has a continued wheat import requirement and Russia has increased its export taxes yet again, which is good news for Russia's competitors in wheat-purchase tenders."

Russia has raised its wheat export taxes for the Dec. 29-Jan. 11 period, the agriculture ministry said on Friday. Russia, the world's largest wheat exporter, launched grain exports taxes in June as part of measures to cool domestic food inflation.