Chicago | Reuters — U.S. grain and soybean futures jumped to their highest levels in more than a week on Wednesday as rains threatened to further delay corn and soy plantings and put crop yields at risk.
The gains came a day after the U.S. Department of Agriculture (USDA) on Tuesday cited “unprecedented planting delays” as the reason for slashing its forecast for corn yields more than expected.
Traders remain unsure about how many acres will be planted with corn and soybeans and how much the harvests will produce.
If conditions improve, farmers could switch acres to soybeans, which are typically planted after corn. However, future rains mean that more soybean plantings may be stalled, traders said.
Farmers who are planting and replanting corn and soybeans will “still struggle to finish” due to returning rains, lowering acreage, according to U.S. forecaster Commodity Weather Group.
Late planting of either crop raises the risks that yields could be hurt by hot summer weather or an autumn frost.
“It’s a really bad forecast to try to get anything done for corn and soybean planting,” said Brian Hoops, president of U.S.-based broker Midwest Market Solutions.
The most-active corn contract on the Chicago Board of Trade (CBOT) rose 0.5 per cent to $4.30 a bushel, after soaring 2.9 per cent on Tuesday (all figures US$). Soybeans climbed 2.2 per cent, to $8.78 a bushel.
Wheat advanced 1.6 per cent to $5.26-1/4 a bushel at the CBOT, after ending up 2.1 per cent on Tuesday.
USDA on Tuesday cut its corn yield projection in a monthly report by 5.7 per cent to 166 bushels, surprising analysts who expected a smaller decline.
The drop, along with a three per cent decrease in USDA’s acreage estimate, left the government’s production outlook at 13.68 billion bushels, which would be the smallest corn harvest in four years.
“The report yesterday really set the wheels in motion that USDA recognizes there are some crop issues,” Hoops said.
USDA on Tuesday left its estimates for soybean production and yields unchanged from May. Adjustments to the soybean crop outlook can be expected in USDA’s July report, the agency’s chief economist told Reuters on Wednesday.
It is “far too early to make informed call on soy acres or yield,” said Rich Feltes, vice-president of research for broker RJ O’Brien.
Upcoming rains may be “largely beneficial for crops planted but harmful for 10-12 million acres of unplanted corn,” he said in a note.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.