Soybeans, corn futures see above 1% increase as U.S. crop condition slump

Chicago soybean and corn futures saw an increase of more than one percent each on Tuesday supported by a slight decline in the condition of both crops which have benefited from near-perfect weather across the U.S. Midwest.

Wheat edged higher, recouping last session’s deep losses as the market was supported by lower production in the Black Sea region.

The most-active soybean contract on the Chicago Board Of Trade (CBOT) gained 1.1 percent to $8.55 a bushel, adding to last session’s 1.4 percent rise.

Corn added 1.2 percent to reach $3.59 a bushel, having gained 0.1 percent on Monday, while wheat was up 0.5 percent to $4.90 a bushel, having closed down 1.7 percent on Monday.

After the market closed on Monday, the U.S. Department of Agriculture said 69 percent of the soybean crop is in good to excellent condition as compared with 71 percent a week ago but above 61 percent at this time of last year.

The agency said 72 percent of the U.S. corn crop is in good to excellent condition, below last week’s 75 percent.

A U.S.-China trade war has been weighing on the soybean market, which dropped to a 10-year low in the last session.

Chinese buyers have loaded up on soybeans from Brazil, instead of the United States, because of tariffs on U.S. soy that were threatened for weeks and effected on July 6.

This has lifted Brazilian soybean prices, forcing Chinese oilseed processors to pay a premium.

“U.S. and Brazil soybean prices gained in unison,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

“U.S. bean prices thus remain at an unusually deep discount to Brazilian beans,” he added.

On Sunday, though, the top U.S. Republican lawmaker overseeing trade policies called for a meeting between Trump and Chinese Premier Xi Jinping to ease tensions.

The wheat market is being underpinned by lower production in key exporting nations in Europe and the Black Sea region.

Commodity funds were net buyers of CBOT soybean, soymeal and corn futures contracts on Monday, and net sellers of wheat and soyoil, traders said.