(Bloomberg) — Grains futures rose in Chicago on worsening crop conditions for soybean, corn and wheat amid poorer weather across the farm belt.
Most Read from Bloomberg
The portion of US soybean, corn and wheat fields considered good or excellent dropped for the week ended Aug. 25, according to data Monday from the US Department of Agriculture. Hot and dry weather is raising concerns over a potential drop in yields, while weather forecasts for the crop-growing region show below-average rains over the next week.
Still, grains futures have been trading at their cheapest in 14 years relative to other commodities on the prospect for a bumper US harvest. While recent adverse weather has presented challenges for American farmers, the outlook for ample supplies is expected to continue to weigh on prices.
“I still see a downside on soy and corn as the US harvest starts to get bigger, but it’s going to be very choppy from now,” according to Marex analyst Charlie Sernatinger. “When we talk about dryness hurting the crops it’s not a change in the paradigm, but basically a little bit lower yield, not a lot lower.”
Prices may see some support from an uptick in export demand, even though outstanding sales for the upcoming crop remain below the average for the past few years. Investors are weighing reports that China bought two soybean cargoes from the US and one cargo from Brazil, Sernatinger said.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
Read the full article here
