The Dollar Index fell from two-decade highs hit last week after Australia’s central bank surprised investors with a smaller-than-expected interest rate hike. The move eased fears that higher global rates could trigger a recession that could erode demand for commodities.
“If you look at the external markets, you can say that the environment should be favorable to risk,” said Don Roose, president of US Commodities, based in Iowa.
Chicago Board of Trade December corn settled up 2-1/4 cents at $6.83 a bushel and November soybeans ended up 9-1/2 cents at 13.83-1/4. $2 a bushel.
The strength in crude oil has helped lift grain futures’ prices, given the role of corn as the main US feedstock for ethanol and the use of soybeans in biodiesel, Roose said.
But seasonal pressure from the US crop expansion weighed on the market, capping rallies as traders waited for more information on the size of US crops.
After the CBOT close, commodity broker StoneX raised its estimate for average U.S. corn yield to 173.9 bushels per acre (bpa), from 173.2 previously, but lowered its estimate for corn production to 14.056 billion. bushels, up from 14.168 billion last month.
For soybeans, StoneX cut its US yield forecast to 51.3 bpa, from 51.8 previously, and lowered its soybean production estimate to 4.442 billion bushels, from 4.515 billion.
The maize harvest in the United States was 20% complete on Sunday, the United States Department of Agriculture (USDA) said in a weekly progress report, which is below the five-year average of 22%. The soybean harvest was further along, 22%, but still below its five-year average of 25%.
CBOT Soft Red Winter wheat futures prices followed the firm trend and closed lower on technical selling and profit taking after last week’s two-month highs. Benchmark December CBOT wheat fell 9 cents to end at $9.03 a bushel, but December KC hard red winter wheat ended $9.88-3/4, buoyed by concerns over conditions dry in the Plains durum belt.
Traders continue to monitor tensions between Russia and Ukraine, which are among the world’s largest grain exporters.
Ukraine’s winter wheat sowing for the 2023 harvest covered only a third of the area it did in the same time last year, according to data from the European country’s agriculture ministry on Tuesday. (Additional reporting by Naveen Thukral Singapore and Sybille of La Hamaide Paris; editing by Subhranshu Sahu, David Goodman and Paul Simao)