U.S. grains: Corn extends rally, wheat touches six-week high

Chicago | Reuters — U.S. corn futures extended their rally on Friday, jumping to a four-month high, as forecasts of heavy rain sweeping a wide path across the U.S. Midwest next week fuelled concerns about worsening planting delays.

Chicago Board of Trade (CBOT) corn prices rose for the fifth session, trading through its 100-day moving average.

Meanwhile, an early rally in wheat futures sparked a wave of profit-taking late in the trading session, but they still ended the week on a strong positive note due to bullish news on weather-related concerns and spillover strength from corn.

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Traders said the wheat market was reacting to worries that excess moisture could hamper sowing of spring wheat in the northern Great Plains, as well as potentially cause disease problems for the final growth stages of winter wheat.

Weather also drove soybeans sharply lower. Corn seeding snags have raised the prospect that farmers will shift some areas to later-planted soy, while renewed tensions in U.S.-China trade talks have dampened hopes for a swift return to massive soybean shipments between the two countries.

Showers over the next 10 days are threatening to further slow planting from the Dakotas to Illinois, regions that have endured torrential rain this spring, the Commodity Weather Group said on Friday in a note to clients.

The delayed planting season across much of North America is starting to cause economic ripple effects along the farm supply chain. Executives at agricultural equipment maker Deere and Co. on Friday warned that farmers are becoming “much more cautious about making major purchases,” in part because of the weather impact on planting.

“It’s weather and more weather,” said Craig Turner, a commodities broker for Daniels Trading. “We could lose anywhere from 500 million to one billion bushels of corn because of the planting problems. We’re coming into the weekend and a lot can happen, weather-wise.”

CBOT July corn settled up 4-1/4 cents at $3.83-1/4 cents a bushel (all figures US$). Earlier in the day, the contract hit a high of $3.84-3/4 earlier in the day, the highest price seen since March 27. For the week, the July contract rose 31-1/2 cents a bushel, or 8.95 per cent.

CBOT July soft red winter wheat settled down two cents on Friday at $4.65 per bushel, after hitting a high of $4.73-1/4 during the day, the highest price seen since March 4. The CBOT July contract ended the week up 9.47 per cent, breaking a five-week-straight weekly decline.

K.C. July hard red winter wheat on Friday settled up 3-1/2 cents at $4.20-1/4 a bushel, while MGEX July spring wheat ended the day up one cent to $5.27-3/4.

And CBOT July soybeans settled down 18 cents on Friday, down 2.3 per cent, at $8.21-3/4 per bushel after falling to $8.20-1/2 earlier in the day. For the week, the July contract rose 12-1/2 cents a bushel, up 1.5%.

The most-active corn contract on the Chicago Board of Trade ended the day up nearly one per cent at $3.83-1/4, after earlier touching its highest since Dec. 19 at $3.84-3/4.

The most-active soybeans contract closed the day down 2.3 per cent at $8.21-3/4 a bushel, but still on track to end the week on a positive note after rebounding from a 10-year low on Monday.

Traders are anxious, too, to see the U.S. Department of Agriculture’s next crop update on Monday to see whether farmers made much headway during relatively drier conditions earlier this week.

Adding to the grain market uncertainty is what the U.S. would do with its massive stocks of soybeans, particularly if those stockpiles grow even bigger this year. The U.S. is likely to permanently lose soybean export market share in China the longer U.S.-China trade talks drag on, a top executive at the U.S. Soybean Export Council said on Friday.

— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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