NEW YORK, January 3 (FinanceEnquiry.com) - The following article outlines the US grain futures outlook for the first week of January 2012.

During the last week, US grain futures attained greater highs due to adverse weather conditions in Argentina and as Brazil raised concerns over crop conditions in the South American countries that lifted hopes for overseas demand for US supplies.

As a result, US grain futures exhibited strong upside in final two weeks of 2011. Moreover, it was observed that in nine out of ten trading sessions, corn, wheat and soybean prices hiked. Since South America is the chief competitor of US exporters and majority of traders have been focusing on Southern Hemisphere countries lately, it is likely to have greater demand for the US grain.

The Chicago Mercantile Exchange posted corn futures for March delivery trading at $6.4712 a bushel on Friday. Corn futures too led by 2.8% in 2011, which was the third successive annual gain reflecting increasing global demand from the ethanol sector based on worn out inventories. Thus, boosting the price to record highs of $7.9900 per bushel in June.


On Friday, corn prices increased to a seven-week high when agricultural meteorologists announced that hot and dry weather conditions may show up in major corn growing regions of Argentina, which is the second-largest shipper of grain in the world. Such weather conditions are likely to lower soil moisture, potential threatening yields and weighing on the quality of the harvest. In the meantime, soybeans for March delivery rose by 3.25% to $12.1188 a bushel on Friday and prices gained to a seven-week top of $12.1862 on Wednesday.

Regardless of the rally of around 9% in the past two weeks, soybean prices fell by 14% in 2011, which is the first annual decline since 2008.
On Friday, T-Storm Weather, an industry weather group, announced that every soy-growing region in Argentina and Southern Brazil received less than 50% of average rainfall since the start of December.

However, wheat futures continued to receive aid from dry weather conditions in the US Great Plains.

According to Telvent DTN, weather conditions in the Southern Plains are to stay mostly dry with ahead of the expected temperatures in the coming 10 days that raised concerns over the inactive US winter-wheat crop. As per the government figures, corn stood as the biggest US crop tagged at $66.7 billion, closely followed by soybean at $38.9 billion and wheat at $13 billion.