Corn around 8-year highs on tightening world supplies, wheat up
Chicago corn futures jumped on Monday to their highest since June 2013 as concerns about tight global supplies buoyed the market.
Wheat hit a seven-year top, while soybeans touched eight-year highs.
“Corn is in the driver’s seat as there are supply worries as well as strong demand,” said one Singapore-based grains trader. “Corn is pulling prices of wheat and soybeans higher.”
Chicago Board of Trade most-active corn rose 2.1% to $6.46-1/4 a bushel at 0931 GMT, getting earlier on Monday hit $6.48-1/2 a bushel, the highest since June 2013.
Soybeans were up 0.3% at $15.20-3/4 a bushel, after touching their highest since June 2013 at $15.39-1/2 a bushel. Wheat rose 2.1% to $7.27-3/4 a bushel after earlier hitting $7.31-1/2 a bushel, the highest since May 2014.
Dryness in Brazil and a cold spell in the United States has raised supply concerns in the world’s two biggest corn exporters, while stocks from the 2020 harvest have been dwindling and demand from China has been growing.
“Fuel is being added to the fire by reports that the Argentinian government is considering raising its export taxes on grains and oilseed (products), which would further tighten the situation on the world market,” Commerzbank said in a note.
“This is because Argentina also plays a very important role in supplying the world markets, especially as the world’s largest soybean meal and oil exporter.”
Argentina is considering an increase in grains export taxes, an official said on Friday, sparking concern among farmers who fear the government might intervene again in the markets in a bid to control inflation.
Wheat is being supported by unfavourable weather in the United States and “the fact that wheat is increasingly likely to find its way into the world’s feed troughs given the high corn and soybean prices,” Commerzbank added.
Source: Reuters (Reporting by Naveen Thukral and Michael Hogan, editing by Ken Ferris)