Thursday August 28, 2014




Home »  News »  Agriculture

Corn, soy higher on worries about late-July U.S. weather

Wheat up on short-covering, Chinese demand, Russia worries

U.S. corn and soybean prices rose Monday on forecasts for stressful heat in the Midwest later this month, with the new-crop December corn contract rebounding from a 2-1/2 year low set last week.

Soybeans drew additional support from tight U.S. cash supplies of soybeans and soymeal which lifted the front months of both products to contract highs.

Wheat firmed on export demand for U.S. grain and concerns about crops in Russia.

At the Chicago Board of Trade, September corn futures settled up 7-1/2 cents at $5.33-1/4 per bushel. August soybeans ended up 23-1/2 cents at $14.55-1/2 a bushel while new-crop November soy ended up 24 cents at $12.52-1/4 (all figures US$).

CBOT September wheat settled up three cents, at $6.63 a bushel.

Weather was the focus for corn traders as the Midwest crop approached its critical pollination phase, when hot and dry weather can cut yield potential. Following planting delays during a cool, wet spring, much of the crop will be pollinating in the second half of July.

The Commodity Weather Group (CWG), a private U.S. weather forecaster, said the southwestern portion of the Midwest should see only limited rain in the next two weeks.

"This will allow for some minor corn stress to build in parts of Missouri, central and southern Iowa, Nebraska and Kansas," CWG said in a daily note to clients.

Added Dan Cekander, an analyst with Newedge USA in Chicago, "The 11- to 15-day forecast was definitely hotter than it was going home Friday... fear of a developing warmer, drier pattern in the southwestern Corn Belt is the bottom line."

The CBOT December corn contract, which represents the 2013 harvest, ended up 9-1/4 cents at $5.00-1/2 a bushel. The contract fell to $4.89-1/2 on Friday, its lowest level since late 2010.

December corn tumbled nearly 12 per cent in the previous two weeks as mostly benign crop weather allowed traders to be more confident about prospects for U.S. corn production. The U.S. Department of Agriculture has projected the crop at a record-large 14.005 billion bushels.

Recent crop weather has been mostly favorable, and USDA's weekly U.S. crop progress report due later on Monday is expected to show an improvement in crop ratings.

Analysts surveyed by Reuters expected USDA to rate 68 per cent of the corn and soybean crops in good to excellent condition, both up from 67 per cent a week earlier.

Contract high in July soybeans

Soybeans followed corn higher, with the spot July soybean and soymeal contracts drawing added support from extremely tight U.S. cash markets. CBOT July grain and oilseed contracts expire on Friday, adding to volatility in the spot months.

July soybeans settled up 21-1/4 cents at $16.09-1/4 a bushel after setting a contract high at $16.16-1/4. July soymeal set a contract high at $512 per short ton and settled at $511.10, up 4.5 per cent for the day.

"You've got no supply," said Sterling Smith, futures specialist with Citigroup in Chicago, referring to U.S. soymeal. "The long side of the market has got the short pinned. If you don't have the stuff to deliver, you've got to get out."

Wheat higher after China purchase

Wheat futures rose on short-covering and supportive fundamental news, including more sales of U.S. soft red winter wheat to China. The USDA on Monday confirmed private sales of 840,000 tonnes of soft red wheat to China for 2013-14 shipment, bringing China's purchases since last week to more than 1.3 million tonnes.

Meanwhile, after a promising start to the U.S. soft red winter wheat harvest, rains in the eastern Midwest and mid-South have slowed progress and threatened crop quality, agronomists said.

Also, two leading agricultural analysts on Monday cut their forecasts for Russia's 2013 wheat crop, citing drought in several growing regions and lower-than-expected yields.

-- Julie Ingwersen is a Reuters correspondent covering ag commodity markets in Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.


Comments


NOTE: To post a comment in the new commenting system you must have an account with at least one of the following services: Disqus, Facebook, Twitter, Yahoo, OpenID. You may then login using your account credentials for that service. If you do not already have an account you may register a new profile with Disqus by first clicking the "Post as" button and then the link: "Don't have one? Register a new profile".

The Yorkton This Week welcomes your opinions and comments. We do not allow personal attacks, offensive language or unsubstantiated allegations. We reserve the right to edit comments for length, style, legality and taste and reproduce them in print, electronic or otherwise. For further information, please contact the editor or publisher, or see our Terms and Conditions.

blog comments powered by Disqus


Quick Vote

Survey results are meant for general information only, and are not based on recognised statistical methods.


Markets





LOG IN



Lost your password?