Chicago corn futures trended up further on Friday as concerns mounted over delays in planting crop in the US Midwest corn belt, while soyabeans and wheat tracked commodity markets, extending gains. Oil, gold and copper rose on Friday as a weaker dollar encouraged investors to edge back into tattered commodities, although caution was still the watchword ahead of US inflation data.
Corn prices have bounced off a eight-week low struck on Thursday after the US Department of Agriculture's (USDA) unexpectedly upbeat outlook on global corn production even though rain interrupted planting in the United States, the world's top exporter of the grain.
The July corn contract rose 0.92 percent to $6.86 per bushel by 1032 GMT. The contract fell as low as $6.59 a bushel on Thursday, its lowest level since mid-March. "Everyone is sceptical about the USDA numbers - there are likely to be further delays in planting the US crop," said Brett Cooper, senior manager, markets at FCStone Australia.
WeatherBill, a weather insurance firm, has estimated that 834 million to 1.6 billion bushels of corn may be lost due to heavy rains and planting delays so far in the eastern US corn belt, equal to 6 to 12 percent of the US corn crop, using the USDA's initial 2011 production forecast of 13.5 billion bushels. "The market is recovering and is looking into fundamentals," an analyst said. "The new crop in Europe is not looking good, there are concerns about weather in North America."
She said the market will be weather-driven in the next few weeks until assessment on how it will affect new crop. "Any yield downgrade will make the market bullish." Cooper said the supply/demand outlook for corn and soyabeans remained price supportive as China was likely to be back in the market for both products.