The most active corn contract for December delivery rose 14 cents, or 2.57 percent, to settle at 5.5925 U.S. dollars per bushel. September wheat soared 25.75 cents, or 3.66 percent, to settle at 7.295 dollars per bushel. November soybean climbed 4.25 cents, or 0.31 percent, to settle at 13.535 dollars per bushel.
CBOT corn and wheat rallied strongly on fall in production estimates and strong market demand worldwide, the Chicago-based research company AgResource noted.
Wheat has been the CBOT upside leader on rising Black Sea wheat values. Rumors of poor-quality EU wheat due to excessive July rainfall along with the decline in the Russian wheat crop has spiked world wheat prices upwards, and the upward trend may persist as importers and end users having limited forward coverage beyond September.
Corn rallied as commercial U.S. crop tours reported less than expected yield potential in the Eastern Midwest amid a sharp fall in Brazilian corn crop estimates. Most of Brazil's corn export loss would be pushed to the United States as China is rumored to have bought additional Ukraine corn for October-November on Friday.
U.S. weekly export inspections were larger than expected in corn with China taking 32.6 million bushels. For the week ending July 29, the United States shipped out 54.5 million bushels of corn, 14.2 million bushels of wheat and 6.6 million bushels of soybeans. For respective crop years to date, the United States has exported 2,472 million bushels of corn, up 973 million bushels or 65 percent year on year; 2,139 million bushels of soybeans, up 692 million bushels or 32 percent; and 138 million bushels of wheat, down 35 million bushels or 20 percent.
Weather forecast shows it is vastly drier across the Southern Lake States and does not break out meaningful rain for Southern Iowa and Central Illinois until Aug. 11. Northern Iowa stays dry. A few showers will dot Northern Minnesota and Northern Wisconsin, but the rains will be north of key corn/soy areas. Otherwise, the forecast is arid with limited rain chances for the Plains and the Northwest Midwest. Soil moisture levels will continue to fall.
CBOT has been focused on Central U.S. weather and each raindrop that falls. However, it is the sharp drop in 2021 world grain production that should captivate the market with demand pushed at the United States over the next six to nine months. AgResource holds that a demand grain led bull market is ahead with corn/wheat being the upside leaders.