U.S. grains: Rains fuel crop worries, lift corn, soy, wheat

CBOT July 2019 corn futures with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. grain and soybean futures jumped on Thursday as expectations for more rain in the U.S. Midwest heightened worries about bad weather reducing autumn harvests.

Forecasts called for rain over the next five days, which would keep some fields too wet to plant and add stress to planted crops that are in early growing stages, analysts said.

Widespread storms already caused unprecedented delays in corn plantings this spring and prevented farmers from planting on millions of acres. The weather problems heap more worries on a farm sector that has suffered from years of low crop prices and a U.S.-China trade war that is slowing agricultural exports.

Corn futures reached a five-year high on Monday on worries about water-logged farm fields, before pulling back to a one-week low on Thursday.

“We have a market that’s buying the breaks based on the concerns that are created by adverse weather in the U.S.,” said Arlan Suderman, chief commodities economist for INTL FCStone.

The most-active corn contract on the Chicago Board Of Trade climbed 2.2 per cent to $4.50 a bushel (all figures US$). Technical buying helped lift prices, traders said.

CBOT soybeans rose 1.2 per cent to $9.15-1/2 a bushel, while CBOT wheat gained 0.9 per cent to $5.26-1/2 a bushel.

A sharp fall in the U.S. dollar helped support the markets as it makes dollar-priced commodities cheaper overseas.

Yet recent gains in corn prices have hurt prospects for export demand, traders said.

Weekly U.S. corn export sales totaled 399,200 tonnes, according to the U.S. Department of Agriculture. That was near the low end of market forecasts for 300,000 tonnes to 900,000 tonnes.

Weekly U.S. soybean export sales reached 771,600 tonnes, near the high end of expectations for 200,000 tonnes to 800,000 tonnes. U.S. wheat export sales were 187,600 tonnes, below estimates for 200,000 to 500,000 tonnes.

“The U.S. is again one of the highest priced sources of commodities in the global market,” said Karl Setzer, senior market analyst at Growmark.

Soybean traders will keep an eye on next week’s G20 summit next week as U.S. President Donald Trump and his Chinese counterpart Xi Jinping are expected to meet there. An ongoing trade war between Washington and Beijing has slowed U.S. soybean exports to China, the world’s top importer of the oilseed.

“A major breakthrough will be needed for a positive price reaction by the trade for the soy complex,” said Jerry Gidel, grain strategist for Price Futures Group.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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