U.S. corn futures surged two per cent to their highest levels in more than a month on Thursday, boosted by tight supplies and by a wet spring that may cause corn acres to be switched to soybeans.
Wheat futures also gained as an annual crop tour surveyed fields damaged by drought and freezing temperatures. The annual crop tour of top wheat-growing state Kansas projected production 18 per cent below last year.
Soybeans ended mostly lower, with new-crop November soybean’s premium over new-crop December corn falling to the lowest point in more than eight months.
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“Corn futures are up… on ever-more-convincing odds that some acres are shifting out of corn as planting delays become more severe,” analyst Richard Brock said in a note to clients.
“The crop still isn’t actually late, but with a foot of snow on the ground in many Corn Belt locations, it is likely we will be before planters are done,” Brock said.
If farmers cannot plant their corn by optimal dates in mid-May, they may switch to soybeans, which have a shorter growing season.
The most-active Chicago Board of Trade July corn contract settled 15-1/4 cents higher at $6.62 per bushel while December corn was up 8-1/2 cents at $5.59 (all figures US$).
CBOT July soybeans eased 0-3/4 cent to $13.72-1/4 per bushel. November beans shed 5-1/4 cents to $12.04.
U.S. ethanol plants and processors are bidding for corn at the highest levels ever amid the tightest stockpiles of both corn and soybeans in at least nine years. Rumours continued to swirl that U.S. traders were trying to import soybeans from South America to stem domestic shortfalls, which further weighed on the CBOT soy complex.
Snowfall in the western and northern Midwest was delaying corn plantings, which were already off to the slowest start in history. More precipitation was forecast in the coming days.
The moisture was needed for soils still dry from last summer, which had the worst drought since the 1930s, but could delay plantings past mid-May — when farmers seek to have their corn in the ground to ensure crops are not pollinating during the hottest days of summer.
“The weather is certainly supportive of the corn market and supportive of the wheat market as well,” said Ken Smithmier, an analyst at The Hightower Report in Chicago.
Tour projects drop in Kansas production
Farmers in Kansas planted winter wheat during last year’s worst U.S. drought since the 1930s. Soil moisture, especially in the western part of the state, remains short and yields are expected to decline, according to crop scouts on the final day of the annual Wheat Quality Council crop tour.
Scouts estimated total wheat production in the state at 313.1 million bushels, down 18 per cent from 2012. The low production forecast reflects expectations that farmers will abandon 18 per cent of their planted acreage, twice as much as usual, due to poor crop conditions.
CBOT July wheat gained one per cent, or 7-1/2 cents, higher at $7.285 per bushel. Markets closed before the tour concluded at the Kansas City Board of Trade.
More than 80 per cent of the state was still experiencing severe to exceptional drought, state and federal climatologists said in their weekly Drought Monitor report issued on Thursday. A year ago, only 2.36 per cent of Kansas was suffering from severe to exceptional drought.
— Michael Hirtzer covers ag commodity markets for Reuters in Chicago. Additional reporting for Reuters by Sam Nelson in Chicago, Julie Ingwersen in Kansas City, Michael Hogan in Hamburg and Naveen Thukral in Singapore.
