The most active corn contract for December delivery rose 4.25 cents weekly, or 1.23 percent, to 3.4875 dollars per bushel. December wheat delivery edged 1.25 cents higher, or 0.29 percent, to 4.2725 dollars per bushel. November soybeans fell 3.5 cents, or 0.36 percent, to 9.7525 dollars per bushel.
At the beginning of this trading week, short covering pushed up the prices of CBOT corn and wheat by some two percent.
Additional support for corn came from the latest crop progress report released by the U.S. Department of Agriculture, indicating a delayed corn harvest, with only 38 percent complete, compared to an average of 59 percent between 2012 and 2016.
Although CBOT wheat settled this week in the slightly positive territory, it has been another disappointing week for the wheat in the eyes of many traders. After an impressive key reversal higher on Monday, the wheat market simply kept a downturn.
Analysts said that a sharply higher dollar and weak export sales put more pressure on the CBOT wheat futures.
A strong dollar will cut the competitiveness of U.S. agricultural commodities on international markets, especially when the euro’s rate has gone down to about 1.16 U.S. dollar after Catalonia’s parliament announced to secede from Spain’s central government.
The deepened crisis has led to the devaluation of the euro, which makes European wheat more competitive. No wonder the future prices of Paris wheat rose on Friday while the Chicago wheat plunged by more than one percent, almost pared the gains earlier this week.
China factors have played an important role in the agricultural commodities markets. Robust demand from China continued to support CBOT soybeans prices, while China’s plan to increase the use of bioethanol gasoline would potentially boost the corn prices, said some analysts.
Years of support for corn farmers has left China with a substantial stockpile. In 2016, China’s corn output stood at around 220 million tonnes, while stocks amounted to 230 million tonnes, according to statistics.
The International Grains Council this week cut its forecast for global corn stocks, despite lifting its production forecast. The council cited a larger estimate for industrial use in China, as the country sets off on ethanol industry expansion.
Although Chinese officials said China will not rely on corn imports for its bioethanol plan, the expansion is undoubtedly a good news for world corn market.