U.S. corn and soybean futures soared on Friday on worries that wetter-than-expected weather next week will extend planting delays and reduce output for the autumn harvest.
Planting remains slow across the U.S. Midwest due to soggy conditions, with further disruptions expected from another round of rain that agricultural meteorologists forecast to start this weekend.
More planting delays could reduce the number of acres farmers sow. Also, key phases of crop development might not happen until the hottest parts of the summer, which could cut yields.
“We’re a little worried that we might never see a dry day again here in the Midwest,” said Jack Scoville, vice president of Price Futures Group in Chicago.
Chicago Board of Trade December corn, which represent the crop that will be harvested this fall, climbed 1.9 per cent to $5.58-1/2 a bushel and closed up 1.5 per cent for the week (all figures US$).
New-crop November soybeans rallied 1.9 per cent to $13.30-1/4 a bushel to close up two per cent for the week.
Farmers are watching the skies, with showers expected to cover most of the U.S. Midwest from Saturday to Monday, on Wednesday and Thursday, and over the following weekend, said John Dee, meteorologist for Global Weather Monitoring.
Rains kept growers out of their fields for most of last week, limiting their ability to finish planting corn or catch up on soybeans, the U.S. Department of Agriculture said in a weekly crop progress report released Monday.
Soybeans were 57 per cent planted as of June 1, the slowest rate for that time of year since 1996 and behind the five-year average of 74 per cent, according to the government. Corn was 91 per cent planted, behind the five-year average of 95 per cent.
USDA will issue an update on planting progress on Monday and on grain supplies and demand on Wednesday.
In the monthly supply/demand report, the government is expected to trim its outlook for corn supplies at the end of the next crop’s marketing year on Aug. 31, 2104, according to a Reuters poll.
USDA is not expected to make major changes to its forecast for soybean inventories and will likely cut its projection for wheat supplies, analysts said.
Index funds roll
Gains in front-month soybean and corn futures were limited by speculative traders rolling out of positions in nearby contracts ahead of the expiration, traders said.
July soybeans edged up 0.1 per cent to $15.28-1/4 a bushel, while July corn rose 0.5 per cent to $6.66-1/4 a bushel.
July soybeans gained 1.2 per cent for the week, the sixth straight weekly gain. The contract’s last run of six or more straight weekly gains ended in the first week of March 2012.
Japan snubs some U.S. wheat
Wheat futures were little changed, with the front-month July contract sliding 0.2 per cent to $6.96-1/4 a bushel.
Traders shrugged off Japan’s suspension of certain imports for the second straight week, following reports that an unauthorized strain of genetically engineered wheat was found in the U.S. state of Oregon in April.
Japan’s suspension of certain imports will likely be short-lived, said Rich Nelson, chief strategist for Allendale.
“The world needs this variety of soft white wheat, which pretty much only comes from U.S.,” he said. “If we miss another tender or two out of Japan, I don’t think people are going to be too concerned.”
July wheat was down 1.3 per cent for the week, the first loss in three weeks.
— Tom Polansek is a Reuters correspondent covering agriculture and futures markets in Chicago.