Chicago | Reuters — U.S. corn futures rose on Thursday for a fourth straight session as dismal weather forecasts signalled further planting delays in the Midwest, prompting commodity funds to cover short positions, analysts said.
Chicago wheat futures hit a one-month high, led by corn, and soybeans followed the firm trend.
Chicago Board of Trade July corn settled up 9-1/2 cents at $3.79 per bushel, after reaching $3.80-3/4, its highest since March 29 (all figures US$).
CBOT July wheat ended up 18-1/4 cents at $4.67 a bushel after reaching $4.68-1/2, its highest since April 12, and July soybeans finished up 4-1/4 cents at $8.39-3/4 a bushel.
Corn remained the focus of the market as the outlook for rain over much of the next 10 days threatened to stall field work, which is already behind schedule.
“A series of at least three storm systems is expected to move across the central U.S. over the next 10 days, with a break of no more than a day or two between each system. This will provide little time for soils to dry out… and will severely limit corn and soybean planting progress,” space technology company Maxar said in a daily weather note.
Farmers had seeded 30 per cent of the U.S. 2019 corn crop by Sunday, the U.S. Department of Agriculture (USDA) said on Monday, well behind a five-year average of 66 per cent.
The weather problems come at a time when commodity funds have built up massive net short positions in corn, soybean and wheat futures, leaving the markets vulnerable to bouts of short-covering.
“It’s still all (about) weather. You’ve got the speculative shorts on the ropes, so the market stays relatively firm,” said Tom Fritz, a partner with EFG Group in Chicago.
Soybeans followed corn higher but gains were capped by expectations that planting delays could prompt farmers to switch some acres intended for corn to soybeans. Ample soy inventories from last season also hung over the market.
“We’ve got a really big stocks-to-use ratio in beans, so getting bullish here is a little premature,” said Bill Gentry, managing director of agriculture consulting at Risk Management Commodities.
CBOT wheat futures posted the biggest gains of the three grains, but analysts attributed the strength in wheat to technical strength and short-covering, rather than fresh demand or threats to supply.
“We had strong inspections on Monday and the weekly (wheat export sales) data confirmed that, with their shipments. I think that’s probably somewhat supportive, on the demand front. But I really think all this buying is tied to short-covering and concern for the corn crop,” said Rob Hatchett, senior economist at Doane Advisory Services.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.