Corn futures on the Chicago Board of Trade (CBOT) soared to a 16-month high, surpassing $5 per bushel on Tuesday, driven by robust U.S. export demand and expectations of tightening inventories. Analysts noted that this price increase is beneficial for farmers after last year’s market slump, which saw prices fall to their lowest levels since 2020 due to oversupply.
Key Highlights:
Market Performance:
The most active corn contract (Cv1) reached a critical price level of $5, prompting farmers to increase sales to capitalize on the rally.
Wheat futures also saw gains, reaching their highest price since October, while soybean futures advanced, benefiting from corn’s upward momentum.
Export Demand:
Strong demand for U.S. corn remains robust, with the U.S. Department of Agriculture reporting that 1.6 million metric tons were inspected for export last week, exceeding analysts’ estimates of 975,000 to 1.4 million metric tons.
Analysts, including Arlan Suderman from StoneX, emphasized that price increases have not dampened export interest.
Tariff Relief:
Additional price support came from the absence of new tariffs from U.S. President Donald Trump, which could disrupt agricultural trade. Analysts suggest that ongoing trade negotiations may encourage importers to purchase more U.S. grain and soy.
Closing Prices:
CBOT March corn futures (CH25) closed 5-3/4 cents higher at $5.02 per bushel, marking the highest price for a most-active contract since October 2023.
March wheat (WH25) ended up 4-3/4 cents at $6.04-3/4 per bushel, and March soybeans (SH25) rose 2-1/2 cents to $10.38-1/2 per bushel.
Supply Outlook:
Corn supplies are expected to tighten in the coming months, while soybean availability is projected to remain plentiful. The National Oilseed Processors Association reported that U.S. soy processors crushed their second-largest volume of soybeans ever in January.
Weather Concerns:
Traders are monitoring weather conditions in both Russia and the U.S., where cold temperatures could pose risks to wheat crops. In Argentina, recent rains have alleviated some drought concerns for soy and corn crops, according to the Rosario grains exchange.