Soybeans and corn gain with oil, yet head for weekly declines

what happened

Soybean and corn futures rose on Friday, supported by higher crude, which matters for grains because they are increasingly used to make biofuels. Still, expectations of plentiful supplies around the world capped the gains, and both crops are heading for a weekly decline, Reuters said. Wheat also firmed slightly, recovering part of its recent losses.

The most-active soybean contract on the Chicago Board of Trade climbed 0.4% to $11.93½ a bushel, corn added 0.3% to $4.41½, and wheat rose 0.4% to $6.01¾. Soybeans are down more than 3% this week, their steepest weekly drop since late July, while corn could post a sixth straight weekly loss.

Brent settled more than $3 higher on Thursday after fresh strikes on tankers and renewed questions over the course of the US-Israeli conflict with Iran. The US Department of Agriculture publishes its crop size estimates next week; analysts expect corn output to be cut to 15.962 billion bushels and soybean output raised to a record 4.597 billion. Russia and Ukraine have agreed to join three-way talks with the US in Abu Dhabi on November 10 and 11, which could restore access to Black Sea shipping routes.

why it matters

For markets, the key point is that higher oil supports farm commodities through biofuel demand, but a large harvest and a possible return of Black Sea exports limit that effect. Traders will focus on the USDA report and oil's direction in the coming days.

market impact

Soybeans and corn: higher oil supports biofuel demand, but a large harvest holds prices back

• ↔Soybeans mixed — higher oil lifts demand expectations, while a record crop outlook weighs on prices
• ↔Corn mixed — biofuel demand linked to oil helps, but plentiful supply expectations cap gains
• ▼Wheat pressure down — prospects of renewed Black Sea shipments reduce fears of supply disruption

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instruments