May 5, 2021
Most active US corn futures reach US$7 for the first time since 2013
The most active corn futures on the Chicago Board of Trade (CBOT) reached US$7 a bushel for the first time since 2013 due to tightening global supplies of the commodity and dry crop weather in Brazil, Reuters reported.
Analysts in the United States said corn demand remains high even with rising prices, allowing the market to increase its gains.
Greg Heckman, chief executive officer for global grains trader Bunge Ltd, said strong profits for meat production means there is no decline in demand for crops.
Heckman said there are livestock feed producers in Asia that have switched from corn to wheat, but added the upsurge in wheat livestock feed in China is short-term.
The most active July corn futures contract on the CBOT ended up 17-1/4 cents at US$6.96-3/4 per bushel with a peak of US$7.04 a bushel, the highest price since March 2013 for a most-active contract. Front-month corn futures matched the eight-year high of US$7.58-1/4 a bushel on May 3.
Traders said the gains helped push wheat and soybean prices up.
The most active CBOT wheat futures settled 8-3/4 cents up at US$7.26-3/4 per bushel. Soybean futures closed 14-1/4 cents at US$15.38-1/4 per bushel.
Traders also said the soybean market is supported by tight oilseed inventories, even though there are concerns of declining demand for vegetable oil in India because of the COVID-19 situation there.
Weather forecasts in Brazil predict no sign of rains for the country's corn-growing areas in the south, keeping the focus on global supply concerns even though there is positive progress in United States planting. The second annual crop in Brazil is important to boosting short-term availability ahead of the US harvest later this year.
Consultancy Agritel said dry weather has continued in Brazil, with maize crops suffering.