Chicago | Reuters — U.S. corn futures exceeded a three-week high on Friday and soybeans advanced as forecasts for a heat wave fuelled concerns about potential damage to crops growing in farmers’ fields.
Traders focused on worries about hot, dry conditions after heavy rains and flooding caused unprecedented delays in corn planting this spring. The planting disruptions left some corn plants with shallow root systems that make the crop more vulnerable to damage from unfavourable weather.
“You’ve got 10 days of low to upper 90s (32-38 C) on a crop that really can’t take much more stress,” said Jim Gerlach, president of Indiana-based broker A/C Trading.
“It’s been stressed from the get go.”
Most actively traded Chicago Board of Trade December corn futures climbed 11-1/4 cents to $4.59-1/4 a bushel (all figures US$). The market traded up to $4.60-3/4, its highest since June 17.
Most-active November soybean futures jumped 14-1/4 cents to $9.31-1/2 a bushel, while most-active September wheat futures rose 1-1/2 cents to $5.23 a bushel at the CBOT.
“Confidence is rising in forecasts for hot, dry weather to build over significant portions of the Midwest, raising stress on corn and soybean crops with shallow root systems,” said Arlan Suderman, chief commodities economist for U.S.-based broker INTL FCStone.
Analysts shrugged off a U.S. Department of Agriculture (USDA) report issued on Thursday that raised the government’s production forecast for corn based on its larger-than-expected June 28 planted acreage estimate of 91.7 million acres.
Traders deemed USDA’s June acreage estimate to be too high for corn and are awaiting the results of a follow-up USDA survey on rain-delayed plantings.
“The USDA chose to post the unbelievable June U.S. planting intention of 91 million acres,” Rabobank analysts said in a note, “but all eyes are on Midwest weather.”
On Monday, traders will assess a separate weekly USDA report on U.S. crop conditions. USDA said 57 per cent of the nation’s corn crop was in good to excellent shape as of July 7, down from 75 per cent a year earlier.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.