U.S. grains: Corn hits one-week high on weather worries

Chicago | Reuters — U.S. corn futures rose nearly two per cent on Friday and notched a one-week high as worries about cool temperatures and excessive rains in the Midwest prompted traders to cover short positions ahead of the weekend, analysts said.

Soybeans firmed following Thursday’s three per cent selloff as Brazil’s currency stabilized. Wheat climbed on excessive moisture in U.S. winter wheat areas and a weaker dollar.

Broad strength in commodities lent support, with the 19-market Thomson Reuters CoreCommodity CRB Index up 1.4 per cent.

Chicago Board of Trade July corn settled up 6-1/2 cents at $3.72-1/2 per bushel after reaching $3.73, its highest since May 11 (all figures US$).

CBOT July soybeans ended up 8-1/4 cents at $9.53 a bushel and July wheat rose 9-1/2 cents at $4.35-1/4 a bushel.

“Weather and the wetter forecast is back in focus. I think that means more to the trade going into the weekend,” said Mike Zuzolo, president of Global Commodity Analytics.

Corn in some areas of the Midwest will need reseeding due to flooding and poor crop emergence, but farmers are running out of time. Corn planted after mid-May begins to lose yield potential.

“Corn is firmer on the improved money flow and on concerns that rains in the southern Midwest will prevent re-planting in some areas,” INTL FCStone chief commodities economist Arlan Suderman said in a note.

For the week, July corn rose 1-1/2 cents or 0.4 per cent to eke out a fourth straight weekly advance. Soybeans fell one per cent to post their fourth weekly decline in the last five weeks, while wheat rose 0.6 per cent.

Grains and soy were recovering one day after Brazil’s currency, the real, slumped as much as eight per cent, the biggest percentage drop since it was devalued in 1999. The currency fell following corruption allegations against the country’s president, Michael Temer.

The drop in the real sent CBOT soybeans tumbling on Thursday as Brazilian farmers rushed to sell soybeans which had been locked in storage bins. The country just completed the harvest of its largest-ever soy crop.

Brazilian stocks and currency rebounded on Friday, slowing farmer offerings, Suderman said.

CBOT July wheat touched a one-week high at $4.36-3/4 a bushel on fund short-covering and a weaker dollar, which tends to make U.S. grains more attractive on the world market. The U.S. dollar index recorded its sharpest weekly decline in more than a year amid U.S. political uncertainty.

Export sales of U.S. wheat in a weekly U.S. government report on Thursday topped trade expectations, and Egypt’s main state grain buyer purchased U.S. wheat this week.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Nigel Hunt in London and Naveen Thukral in Singapore.

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