Futures on corn closed with a gain amid the news on the bad weather and oil prices growth. A weakening US dollar earlier during the session also supported the market.
By the end of CBOT trades, July futures on corn increased by 21 ¼ cent (3.1%) up to 7.07 ½ US dollars per bushel.
Futures on corn grew after a fall of 9% last week due to sales on all commodity markets. The growth of oil prices and a weakening US dollar led to voluminous buying. Corn and oil markets are partially interrelated as ethanol is made from corn and large funds employ it in their investment packages. In its turn, a weakening US dollar makes futures cheaper for holders of other currencies. The corn market fell last week owing to the prices having reached a record high amid concerns over reducing reserves which have been at the level of 15-year low. Since then the prices have dropped by 11.5%.
However, the market participants have been rather cautious over lowering the rates this year. Traders have been carefully monitoring weather conditions as farmers need to have good crops to replenish the reserves. This year the US weather has been cold while precipitations occurred rather often which was an obstacle for farmers in their work.
Yet, according to the forecasts by private analytical companies, warmer and drier weather in Ohio and Mississippi is likely to have positive effects for soil. At the same time, rivers may well overflow their banks. Besides, the weather conditions are adverse in North states which may cause suspense of field work.
