September 16, 2019 / 5:21 PM / 9 months ago

GRAINS-Corn firms as oil rally offsets good crop weather in U.S. Midwest

* Crude oil jumps 12% after weekend attacks in Saudi Arabia

* Corn and soybeans hit multi-week highs

* Fair Midwest weather curbs market ahead of weekly crop data (Writes through with U.S. market open, adds quote, updates prices, changes byline/dateline)

By Karl Plume

CHICAGO, Sept 16 (Reuters) - U.S. corn and soybean futures rose on Monday as support from surging crude oil prices more than offset pressure from favourable weather for late-developing crops.

Signs of easing U.S.-China trade tensions also buoyed the market after confirmation on Monday of more Chinese purchases of U.S. soybeans that triggered a rally last week.

Wheat firmed in tandem with rising corn and as dry conditions in some Southern Hemisphere wheat areas stoked concerns about smaller harvests in key exporters such as Australia and Argentina.

Grain prices were broadly supported by Monday’s crude oil rally of about 12% after weekend attacks on Saudi Arabian oil facilities.

The market drew additional support from a tentative White House plan to increase the amount of biofuels that oil refiners are required to blend each year to compensate for exemptions handed out to small refiners.

“We’re finding carry-over support from the uncertainty with Saudi Arabia and the energy issues,” said Mike Zuzolo, president of Global Commodity Analytics.

“If energy prices go up, then bean oil and soybeans and corn should find some support through biodiesel and ethanol.”

Chicago Board of Trade December corn rose 3-3/4 cents to $3.72-1/2 a bushel by 1155 CDT (1655 GMT), having earlier touched its highest since Aug. 30.

November soybeans touched a 1-1/2 month high of $9.04-3/4 a bushel before slipping to $8.97, down 1-3/4 cents.

CBOT December wheat jumped 5 cents to $4.88-1/2 a bushel.

The U.S. Department of Agriculture (USDA) on Monday confirmed private sales of 256,000 tonnes of U.S. soybeans to China in what traders said was a further confirmation of sales of at least 600,000 tonnes reported by Reuters last week.

Grain traders also focused on yield prospects in the run-up to the U.S. harvest and forecasts for mild Midwest weather. The improved weather raised expectations that crops planted very late in a soggy spring could still achieve decent yields.

“Increasing warmth through the end of September will likely continue to lower frost/freeze risks, and the latest satellite imagery points to overwhelmingly positive late-season conditions in most major agricultural areas,” said Refinitiv Agriculture Research analysts of U.S. corn and soybean crops.

Grain markets will receive a further indication of field conditions later on Monday from the USDA’s weekly crop report, due for release after the market closes.

Additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney Editing by Aditya Soni and David Goodman

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