July 14, 2010
CBOT wheat and soy futures advance, corn futures fall
CBOT wheat futures broke a three-day losing streak on Tuesday (July 13), soy prices touched an eight-week high, benefiting from bullish outside markets while corn futures dropped the most in a week on favourable weather and an unexpected increase in corn crop ratings.
September wheat surged 13.5 cents, or 2.5%, to US$5.4925 per bushel. December corn dipped 4.75 cents, or 1.2%, to US$3.87 per bushel. November soy was up 3.5 cents, or 0.4%, to US$9.545 per bushel, the price reached US$9.625 per bushel, the highest level for the most-active contract since May 14.
Alcoa, the largest US aluminium producer, reported second-quarter sales and profit late Monday (July 12), which topped economists' estimates, enhancing investors' confidence for a stronger global economic recovery. Rekindled fears over eurozone debt crisis and weakening dollar boosted the appeal of commodities as an alternative investment.
Traders noted that although the favourable weather conditions in the US south Plains continued to aid wheat harvest progress, the sharp decline of the dollar and the general rally in equity and commodities markets on Tuesday (July 13) have offset the negative influence of ideal weather and pushed up wheat prices.
73% of the corn crop was rated good to excellent as of Sunday (July 11), up two percentage points from the prior week, according to USDA. Traders previously expected the rating to remain unchanged or lose one or two percentage points. The unexpected rise in crop rating contributed to drag down the corn price along with weather forecasts calling for warm, but generally favourable conditions in US Midwest into the next 3-5 days.
USDA lowered its good-to-excellent rating of the US soy crop to 65%, down one percentage point from the prior week. Traders expected the rating to climb by one percentage point. Traders noted that the soy crop rating inched downward for fifth consecutive week indicated that the US soy crop is getting smaller, and offered solid support to soy prices.
