Corn and soybean prices extend losses on oversupply forecasts
Corn and soybean futures fell on Tuesday at the Chicago Exchange, following reports of projected high inventories for multiple years, even as farming is expected to decline in 2024.
The US Agricultural Ministry said in its quarterly report that corn inventories surged to 8.347 billion bushels as of March 1, a five-year high. A separate report by the ministry expects farmers to cut down corn farming by 5% this year.
The US ministry’s report also showed soybean inventories surged to a two-year high at 1.845 billion bushels, while wheat inventories surged to 1.087 billion bushels, a three-year high.
Analysts expect Ukrainian farmers to increase the farmed space for soybeans this year by 23.5% to 2.199 million hectares, while corn farming spaces will likely decline by 4.5% this year to 3.863 million hectares.
Romania, the EU’s fourth largest wheat producer, and third largest corn producer, harvested 9.6 million tonnes of wheat in 2023, an 11% increase, and harvested 8.52 million tonnes, a 6% increase compared to 2022.
Otherwise, Egypt, the world’s top wheat importer, announced plans to purchase 3.5 million tonnes of local wheat in the 2024 purchasing season.
The Saudi government also launched bids to purchase 595 thousand tonnes of wheat for the period between June and July.
Otherwise, official French data showed that soft wheat harvests remained stable last week, while still at four-year lows overall, with damp weather since the fall hampering agriculture and early crop development in France, the EU’s largest grain producer.
Corn
Corn futures due in May fell 1.8% at the end of the session to $4.26 a bushel.
Soybeans
Soybean futures due in May fell 0.8% to $11.74 a bushel.
Wheat
Wheat futures due in May fell 2.1% to $5.45 a bushel.
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Oil prices hover at two-year highs, Brent approaches $89
Oil prices rose on Tuesday amid mounting geopolitical tensions in the Middle East, while Ukraine intensified its attacks on Russian energy infrastructure.
A guided Ukrainian plane executed airstrikes against Russia’s third largest oil refinery, following a similar series of attacks in March, which curtailed Moscow’s refinery capacity by 14%.
Tomorrow, OPEC+ members will convene to discuss market developments, with analysts expecting no change in production policies.
The Energy Information Administration in the US will also announce official crude inventory data tomorrow, expected to show a decline of 300 thousand barrels.
On trading, Brent June futures rallied 1.7%, or $1.5 to $88.92 a barrel, the highest since June 2022.
US crude futures due in May rose 1.7%, or $1.44 to $85.15 a barrel, the highest since June 2022.
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Gold surges 1.5%, marking fourth successive record high
Gold prices rose on Tuesday as the dollar lost ground against most major rivals, while US treasury yields advanced.
US 10-year treasury yields rose by 6.2 basis points to 4.39%, while two-year yields stabilized at 4.722%.
Fed Chair Jerome Powell said in a San Francisco conference that policymakers shouldn’t rush into interest rate cuts, especially as the US economic performance proves resilient, while inflation remains above 2%.
Earlier US data showed available job openings rose to 8.8 million jobs in February, above 8.7 million jobs in January.
Otherwise, the dollar index fell 0.2% as of 15:41 GMT to 104.8, with a session-high at 105.1, and a low at 104.6.
On trading, gold spot prices rose 1.6% as of 18:26 GMT, or $34.6 to $2291.90 an ounce.
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Wall Street declines by over 1% as US yields surge
US stock indices declined on Tuesday as US treasury yields climbed, as the odds of a Fed interest rate cut in June gained steam on the back of strong US manufacturing and inflation data.
US 10-year treasury yields rose by 6.2 basis points to 4.39%, while two-year yields stabilized at 4.722%.
Fed Chair Jerome Powell said in a San Francisco conference that policymakers shouldn’t rush into interest rate cuts, especially as the US economic performance proves resilient, while inflation remains above 2%.
On trading, Dow Jones fell 1.2%, or 480 points as of 16:14 GMT to 39,086, while S&P 500 fell 1%, or 53 points to 5190, while NASDAQ slipped 1.4%, or 222 points to 16,174.
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