U.S. grains: Corn nears one-year peak as rains stall planting

Chicago | Reuters — U.S. corn futures climbed for a sixth straight session on Monday and touched their highest level in nearly a year as rainy Midwest weather and waterlogged fields stoked concerns about reduced plantings and lower yields for the crop.

Wheat jumped to a three-month high on delayed spring wheat planting in the northern U.S. Plains and excessive, potentially crop damaging rains and flooding in the southern Plains, including in top winter wheat state Kansas.

Soybeans rose in tandem with wheat and corn, lifted by short covering following Friday’s steep slide. Soybeans gained despite stalled trade talks between the U.S. and China, the world’s top soy buyer.

Grain traders were primarily focused on soggy U.S. weather that has delayed spring field work and on forecasts for continued rains.

“The rains slowed corn and soybean planting, especially across the western corn belt. Wet weather is expected to continue across the western Midwest and the Plains this week,” Kyle Tapley, meteorologist with Radiant Solutions, said in a note to clients.

“Very little, if any, planting progress is expected in the western corn belt this week,” he said.

Analysts polled by Reuters, on average, estimated 50 per cent of the U.S. corn crop was planted as of Sunday, well behind the five-year average of 80 per cent for this point in the season. Soybean plantings were seen at 22 per cent done, versus 47 per cent on average.

The U.S. Department of Agriculture is due to release its weekly planting progress report on Monday afternoon.

“If we come in below 50 per cent (on corn) as of Sunday, this would be record low planting progress for any year since USDA started the data series in 1980,” said Rich Nelson, chief strategist with Allendale Inc.

Delayed corn planting may prompt some farmers to shift to seeding soybeans instead, or leave fields fallow. Farmers who plant corn particularly late or under adverse weather conditions could see below-average yields, Nelson said.

Chicago Board of Trade July corn ended up 5-3/4 cents at $3.89 per bushel, after breaking through and holding chart support at its 200-day moving average (all figures US$). The most-active contract , which has climbed more than 10 per cent over six sessions, hit its highest level for a since June 1, 2018.

July soybeans rose 10 cents to $8.31-3/4 a bushel, while CBOT July wheat surged 17-1/2 cents to a three-month high of $4.78-1/4 a bushel.

Commodity funds hold large short positions in all grains markets, leaving them susceptible to bouts of short covering.

Reporting for Reuters by Karl Plume in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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