Chicago | Reuters –– U.S. corn futures surged 4.1 per cent to their highest levels in nearly three years on Tuesday, supported by planting delays across key growing areas of the U.S. Midwest following heavy rains, traders said.
The adverse weather in the Midwest and Plains also fuelled rallies in the soybean and wheat markets due to concerns that farmers will be forced to curtail their plantings this spring and worries that flooding damaged the quality of the wheat crop.
“They are not going to get in the fields,” said Michael Seery, president of Seery Futures. “There is no way. These fields are soaking wet. This is an old-fashioned weather market. It is all about acres and when the rain will stop.”
Chicago Board of Trade July corn futures settled up 16 cents at $4.20-1/4 a bushel (all figures US$). The most-active contract peaked at $4.21, its highest since June 21, 2016.
U.S. grains markets were closed on Monday for the Memorial Day holiday, which delayed the reaction to the weekend weather.
“Grain markets jumped higher again as strong, weekend storms continued to pour heavy rains across a large part of the U.S. growing region and threatens to slow an already delayed planting season,” brokerage Allendale said in a note to clients.
Corn futures have risen for 10 of the last 11 trading sessions, gaining 69 cents as delays across the Midwest have pushed farmers well behind their typical planting schedule. The late planting threatens to cut harvest yields.
The U.S. Department of Agriculture’s (USDA) weekly crop progress report on Tuesday afternoon showed that farmers had planted 58 per cent of their intended corn acres as of May 26. That compares with the five-year average of 90 per cent.
Soybean planting was 29 per cent complete, well behind the five-year average of 66 per cent.
Analysts had been expecting corn planting to be 63 per cent complete and soybean planting to be 31 per cent complete.
CBOT July soybean futures ended up 26-1/4 cents at $8.56 a bushel, with the most-active contract hitting its highest since April 30 during the session.
CBOT soft red winter wheat for July delivery was 15-1/4 cents higher at $5.04-3/4 a bushel. The most-active contract topped out at its highest since Feb. 14.
Private forecaster Commodity Weather group predicted that most of the Midwest would see minimal breaks in rain during the next 10 days, providing limited opportunity for fields to dry out and farmers to make progress between the showers.
— Reporting for Reuters by Mark Weinraub in Chicago; additional reporting by Julie Ingwersen in Chicago, Naveen Thukral in Singapore and Michael Hogan in Hamburg.