Chicago | Reuters –– U.S. corn, soybeans and wheat rallied on Monday, supported by concerns that rains in South America and Europe and dryness in the U.S. could limit crop production, traders said.
“Crops are too wet over there while the next soaking rain looks at least 10 days off over here,” Matt Zeller, director of market information at INTL FCStone, said in a note to clients. “Precip(itation) chances are present past that into the end of the month, but La Nina threats always loom past that.”
Chicago Board of Trade corn futures notched the biggest gains, rising 2.1 per cent and hitting its highest since July 2015. CBOT soft red winter wheat futures rose two per cent to their highest since April 21. Both wheat and corn have risen for four days in a row and seven of the last eight sessions.
The most active soybean contract faced resistance at the near two-year highs hit last week but new-crop November , which rose 1.8 per cent, hit their highest since July 2, 2014.
France’s farm ministry on Monday said wet weather had favoured disease development in rapeseed crops and that other winter crops may see yields suffer in the European Union’s largest grain producer.
“Concerns persist about crop conditions following recent rainfall, with great heterogeneity across regions,” French consultancy Agritel said in a note, adding that it would impact both area and yields.
“This is not just about France but this seems to be the case for the entire European continent, through Ukraine and southern Russia,” it said.
CBOT July soft red winter wheat settled up 10-1/4 cents at $5.07-1/2 a bushel (all figures US$).
CBOT July corn was up nine cents at $4.27-1/4 a bushel.
Brazil, the world’s second-largest corn exporter, continues to face tight supplies, boosting demand for U.S. supplies on the export market.
The U.S. Agriculture Department on Monday morning reported weekly corn export inspections of 1.068 million tonnes, up from 786,507 tonnes last week and near the high end of market forecasts.
Record-high corn prices in Brazil are compelling pork producers to slaughter sows they cannot afford to feed and poultry processors to close plants.
Southern states that are the traditional home to pork and poultry plants have been hardest hit by soaring corn feed prices and a plunge in demand for meat, with companies closing at least three slaughterhouses to cut supply, said Francisco Turra, president of Brazil’s Animal Protein Association.
CBOT July soybeans closed 6-1/4 cents higher at $11.38-1/4 a bushel.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.