U.S. grains: Corn near three-week high on slow planting

Chicago | Reuters — U.S. corn futures rose more than one per cent on Tuesday for their third straight session of gains and neared a three-week high as rains and cold temperatures prevented farmers from planting in much of the Midwestern crop belt, analysts said.

Wheat and soybeans also climbed at the Chicago Board of Trade as speculative investors made bullish bets tied to adverse weather conditions in the United States even as crop-friendly rainfall fell elsewhere in the world.

Corn led the way higher after the U.S. Agriculture Department in a report released after the close of trading on Monday said spring plantings were behind schedule and below analyst expectations.

“The planting figure may be up from last week but it is still short of the five-year average,” said Vanessa Tan, investment analyst at Phillip Futures. “The USDA data gives further evidence of delays to the U.S. planting season this year.”

U.S. farmers had planted 19 per cent of their corn crop as of Sunday, behind the five-year average of 28 per cent and the average analyst estimate of 21 per cent. More rains were moving across the Midwest and southern Delta region on Tuesday, stalling planting of corn, rice and soybeans until at least the weekend, meteorologists said.

“If corn was 23-24 per cent planted, the trade wouldn’t care about this week’s weather,” said Mike Zuzolo, analyst at Global Commodity Analytics in Indiana, adding that USDA was likely to report another behind-schedule planting figure next week.

Farmers who cannot plant were turning bullish on grain prices, forcing ethanol and sweetener makers to bid up in efforts to entice sales. Slow farmer sales contributed to disappointing earnings for trading house Archer Daniels Midland, which reported first-quarter results early on Tuesday.

“The bull spread is very active. There is a cash pipeline issue — it’s pretty tight right now,” Zuzolo said of the cash corn market.

CBOT July corn gained 7-3/4 cents, or 1.5 per cent, to $5.21-1/2 per bushel while new-crop December futures were up 5-1/4 cents to $5.12-1/4 (all figures US$).

Most-active CBOT July soybeans jumped 17-1/4 cents to $15.17-1/4, finishing just below their contract high notched on April 17.

The gains came ahead of Wednesday’s first notice day for deliveries against CBOT May corn, soy and wheat contracts. Strong cash markets were expected to keep deliveries to a minimum, analysts said.

Wheat turns higher

Wheat futures reversed earlier losses to turn higher as an annual crop tour of fields started in the top wheat-growing state of Kansas. Early tour reports showed wheat plants partially damaged from cold and dry weather, with recent rainfall helping to mitigate drought conditions but coming too late to boost yields.

“Even in the fields that looked good from the road because of the recent rains, the tiller counts were lower than what you would expect, and that is from drought conditions,” said Justin Gilpin, chief executive of the Kansas Wheat Commission, who is a scout on the tour.

USDA on Monday reduced the condition of the wheat crop by one percentage point, to 33 per cent good to excellent. That was well below the five-year average of 49 per cent.

Wheat futures were pressured overnight by showers in growing regions in Australia and eastern Europe and news that Argentina authorized an additional 500,000 tonnes in 2013-14 wheat exports, bringing the official exportable surplus for the season to 1.5 million tonnes.

CBOT July wheat ended up eight cents at $7.16-1/2 per bushel while Kansas City Board of Trade July wheat rose 16 cents, or two per cent, to $8.02-1/2, the highest price since June.

— Michael Hirtzer reports on agriculture and commodities for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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