U.S. grains: Rainy Midwest sparks rally in corn, soybeans

(FIle photo by Allan Dawson)

Chicago | Reuters — U.S. corn futures rose 1.9 per cent on Friday as worries about rains delaying the Midwest harvest prompted traders to cover short positions ahead of the weekend, analysts said.

Soybeans and wheat followed corn higher.

Chicago Board of Trade December corn futures settled up seven cents at $3.37 per bushel (all figures US$). November soybeans gained 15-1/2 cents at $9.66 a bushel and December wheat was up 3-3/4 cents at $4.03-1/4 a bushel.

Heavy rains overnight in parts of Iowa, Nebraska and South Dakota stalled the early harvest of what is projected to be a record-large corn crop.

“It’s led by the corn, thanks almost solely to the trade seeing a wetter harvest weather pattern next week than previously forecasted,” said Mike Zuzolo of Global Commodity Analytics.

A wet pattern is likely to persist in the western Midwest for the next few weeks, Commodity Weather Group meteorologist David Streit said, potentially slowing the harvest of corn as well as soybeans.

The U.S. corn harvest was five per cent complete by Sunday, the U.S. Department of Agriculture said, slightly behind the five-year average of seven per cent.

Some short-covering ahead of the weekend added support to corn, soybeans and wheat.

Data from the U.S. Commodity Futures Trading Commission showed funds held large net short positions in CBOT corn and wheat as of Sept. 6, leaving those markets vulnerable to bouts of short-covering. The CFTC is expected to release updated commitments data later on Friday.

For the week, corn and soybean futures fell 1.4 per cent, with the U.S. government’s forecasts for record harvests this fall casting a bearish tone over the market. Wheat futures were unchanged for the week.

“People in the soybean market appear to be focused on the size of the U.S. harvest. But it could be a matter of timing and if export demand remains strong going forward, then prices could find support,” said Alexandre Boy of consultancy Agritel.

Ample global wheat supplies and concern about Egypt, the world’s biggest importer, kept gains in wheat in check on Friday.

Egypt was unable to garner a single offer from wheat suppliers at a state grain tender, forcing it to cancel and raising renewed questions about its ability to tap global wheat markets while maintaining its ban on ergot.

Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Mark Weinraub in Chicago, Naveen Thukral in Singapore and Gus Trompiz in Paris.

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