Chicago Board of Trade (CBOT) corn and soybean futures rallied Tuesday with soy leaping more than two per cent, the most in two weeks, as wet U.S. weather threatened to trim crop acreage and yields.
New-crop December corn futures, the corn contract most affected by planting delays, rose 2.7 per cent, the biggest gain for that contract in a month and the fourth consecutive trading session in which it has climbed.
“There was more rain than expected and more is coming this week. There is concern we’ll lose more corn acres than previously thought and now it’s delaying soybean plantings too,” said Art Liming, a futures strategist for Citigroup.
Tightness in stockpiles of each also lent support and soy garnered extra strength from another sale of U.S. soybeans to China, the world’s top buyer of the legume.
Wheat turned lower as wetter U.S. weather was viewed as favourable to the growing winter wheat crop, thus bearish for futures prices.
CBOT July-delivery corn closed up 9-1/4 cents at $6.66-1/2 per bushel and new-crop December ended 14-1/2 higher at $5.51 (all figures US$).
Soybeans for July delivery were up 33 at $15.09-1/4 and new-crop November rose 40-1/4 to $12.88.
“We’re adding some risk premium to the market so the bottom line is there is a risk-on mentality,” said Don Roose, president of U.S. Commodities in Des Moines, Iowa.
The jump followed wet weekend weather as trading resumed after a three-day holiday break in the United States and in the run-up to a weekly crop update from the government due after the close in Chicago that will detail U.S. corn and soybean planting progress for the latest week.
A Reuters survey of 11 analysts pegged U.S. corn plantings at 86 per cent complete, behind the 95 per cent five-year average and soybean plantings were estimated at 42 per cent complete, the slowest pace in 17 years.
“It’s all weather, due to wetness in Iowa and west-central Illinois. People are trying to understand what it means to planted acreage,” said Dan Basse, president of AgResource.
The rainy conditions have turned attention back to crop risks linked to relatively slow planting so far this year.
Rain over the weekend and this week will drag out late-season plantings of corn and soybeans in the U.S. that are already at a historically slow pace, an agricultural meteorologist said on Tuesday.
John Dee, a meteorologist for Global Weather Monitoring, said one to three inches or more of rain fell over the weekend in the central Midwest, and 0.5 inch to 1.5 inches are expected at midweek in the northern Midwest.
“The only planting that will take place will be in the southern two-thirds of Illinois, Indiana and Ohio the next couple of days,” he said. “If it were all planted this would be perfect, there was pretty good planting progress last week, but not like the week before.”
Farmers have been scrambling to plant corn and soybeans through mid- and late May to catch up after weather delays in April and early May.
Corn planted after mid-May typically has lower yields due to delayed pollination.
The wheat market was more subdued but garnered some underpinning from the strong gains in corn and soybeans.
“There wasn’t much in wheat. There were some rains in Kansas but Oklahoma missed out, so now we’re waiting for harvest to see how much wheat was lost to drought and freezes,” Liming said.
CBOT July wheat was down 3-3/4 cents at $6.93-3/4 a bushel.
November milling wheat in Paris was up 0.75 euro at 204.75 euros per tonne. It had fallen on Monday as the European market focused on the outlook for Black Sea wheat and shrugged off the wet U.S. weather.
— Sam Nelson covers ag commodity markets for Reuters in Chicago. Additional reporting for Reuters by Mark Weinraub in Chicago, Naveen Thukral in Singapore and Gus Trompiz in Paris.