Grain-tracking funds rallied on Tuesday, with wheat leading the advance. The WEAT fund settled at US$24.26, jumping 1.89%, while CORN added 1.59% to US$17.93. The soybean-tracking SOYB fund lagged with a modest 0.32% gain, closing at US$25.24.
The moves were anchored in South America, where dry weather in Brazilian states like Mato Grosso is threatening the next soybean crop. This risk, combined with steady Chinese import demand, provided a floor for SOYB and lent general strength to the complex. A weaker Brazilian real was the session’s hidden engine, making dollar-denominated exports cheaper for global buyers.
Argentina’s influence was starkest in wheat. Farmers there are hoarding grain as a shield against a rapidly depreciating peso, tightening near-term supply. This dynamic, alongside a push from livestock feeders substituting wheat for expensive corn, sent WEAT sharply higher despite ample Black Sea competition.
The corn fund CORN gained 1.59%, buoyed by broad strength but capped by heavy competition from the Brazilian safrinha crop. The weaker real allowed Brazilian exporters to undercut US grain on global markets.
What matters today: Brazilian crop weather and a weaker real are tightening South American grain supply, just as Chinese demand holds firm, collectively lifting US-dollar-denominated grain-tracker funds.
Source: riotimesonline.com
