Commodities are on the rise due to tightening global grain supplies that triggered short-covering and fund-driven buying. U.S. corn, wheat and soybean futures climbed to eight-year highs on Thursday.
However, U.S. corn futures edged lower on Friday, after a weekly gain of more than 7%.
The most-active corn futures on the Chicago Board of Trade rose 0.5% to $6.28-1/2 a bushel, having earlier hit a June 2013 high of 6.35 a bushel. Corn closed up 1% on Thursday. For the week, it is up 7% — the biggest one-week gain since Jan 29.
Soybean futures are up more than 5.5% for the week, the biggest one-week gain since May 2019.
Wheat futures are up more than 8% for the week, the biggest weekly gain since July 2020.
U.S. corn and soy harvests are dwindling, and traders remain concerned about a U.S. cold spell this week and dryness in Brazil threatening prospects for the next crop.
“These markets are largely over-bought and past due for a correction,” StoneX chief commodities economist Arlan Suderman wrote in a client note.
Worries about dry conditions stressing Brazil’s second-crop corn added support, as well as freezing temperatures this week across the U.S. midsection. The Commodity Weather Group said temperatures were cold enough to cause “limited” damage to winter wheat in parts of Kansas and Oklahoma.
Chinese buyers are thought to have booked at least half a million tonnes from the next French wheat harvest, as China looks widely to cover grain import needs heightened by a domestic corn deficit, traders said.