On Tuesday Chicago corn futures rose 1.5% with the market climbing to a more than six-week high, with optimism over a higher Chinese demand for U.S. farm products following talks between the two countries.
Soybeans rose 1.1%, up for a second session, as wheat gained half a percent after closing lower.
“It could lead to higher demand for U.S. agriculture products,” said Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney. “It has a real chance of changing things.”
The most active corn contract on the Chicago Board of Trade was up 1.5% at $3.50 a bushel, after hitting $3.50–3/4 a bushel, its highest since July 10.
Soybeans were up 1.1% at $9.15–1/2 a bushel and wheat rose 0.4% to $5.29–3/4 a bushel.
American and Chinese officials, who spoke by phone on Monday, see progress on resolving issues over the Phase 1 trade deal reached in January and both sides are committed to the success of the agreement, the U.S. Trade Representative’s Office said.
There was also added support for U.S. grain and oilseed markets after the U.S. Department of Agriculture (USDA) pegged the condition of crops behind market expectations.
The USDA’s good-to-excellent ratings on Monday for the country’s corn and soybean crops fell even further than the expected 2 percentage points each as conditions in the American midwest deteriorated due to hot and dry weather conditions.
Corn suffered the biggest decline, with a mere 64% of the crop rated good to excellent, a 5 percentage point fall from last week, and 3% lower than analyst expectations.
Advisory service Pro Farmer on Friday projected U.S. corn and soybean harvests to fall short of U.S. government forecasts, with a corn crop of 14.820 billion bushels and a soybean crop of 4.362 billion bushels.
