Corn and soybean futures rose Friday as Brazil sharply lowered crop estimates and some analysts expressed concerns over several forecasts for hot, dry weather.
July corn went up more than 14 cents to $3.49-6, while July soybeans increased more than 35 cents to $10.98-6.
“The sharply lower Brazil crop estimate made by (Brazil’s crop agency) CONAB yesterday offset our very good crop ratings and recent, excellent timely rains,” observed Larry Shonkwiler, of Advance Trading in Bloomington, Ill.
Conab said lowered estimated of corn production to 69.1 million metric tons for the current season, from a June estimate of 76.2 million tons. Output is now seen falling 18% from last season’s 84.7 million tons, Bloomberg reported.
Some analysts said the market strengthened because it had simply fallen too far. “I believe the markets are bouncing off of oversold conditions more than any 'real' fundamental bullish news,” said DuWayne Bosse of Bolt Marketing in Britton, S.D. “ Corn and soybeans had a very rough week and are due for a bounce."
Angie Setzer, vice president of grain, Citizens Elevator in Charlotte, Mich., expressed a similar view. “I think the market is showing strength today for a multitude of reasons, the biggest being it had overdone it to the downside and was due for a correction,” observed Setzer.
However, Setzer pointed out that unknown future conditions will determine market reactions. "Traders need to realize that al though many acted as though the crop was made at the start of the week, we are a long way from having it in the bin,” she cautioned.
Weather will be the determining factor for prices, according to Bosse. “The six-to-ten and eight-to-14 day forecasts are still showing above normal rains for the Midwest," he said. “What the markets will do next week will greatly depend on Monday’s weather forecast."