U.S. grains: Corn sets five-year high, soybeans up on poor weather

Chicago | Reuters — U.S. corn futures touched a five-year high on Monday and soybeans advanced, supported by forecasts for more rains in the Midwest where wet conditions have delayed plantings and cast doubts on production prospects, analysts said.

Chicago Board of Trade wheat closed modestly higher after a choppy session.

CBOT July corn settled up 1-3/4 cents at $4.54-3/4 a bushel after reaching $4.64-1/4, a contract high and the highest price for a most-active contract since June 2014.

July soybeans ended up 16 cents at $9.12-3/4 a bushel after reaching $9.14, the contract’s highest level since April 15. CBOT July soft red winter wheat rose one cent to settle at $5.39-1/2 a bushel.

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In corn, most contracts hit life-of-contract highs.

“A majority of corn acreage was planted relatively late in the season, shortening the degree-day exposure which is critical for yield. Corn could face further serious yield threats,” said Michael Magdovitz, senior agriculture commodities analyst at Rabobank.

Yet CBOT soybean futures posted the day’s biggest gains as traders shifted their planting worries to the oilseed.

After the CBOT close, the U.S. Department of Agriculture said U.S. soybean planting was 77% finished by Sunday, lagging the average trade estimate of 79 per cent and the five-year average of 93 per cent.

The U.S. corn crop was 92 per cent planted, in line with trade expectations but behind the average of 100 per cent.

Forecasts for the next week remained wet for the southern and central Midwest, space technology company Maxar said in a daily note.

“The continued excessive rainfall… will prevent remaining soybean planting, stall winter wheat maturation and harvesting, reduce winter wheat quality and likely lead to flooding,” Maxar said.

Support from weather woes helped to offset disappointing monthly soy crushing data. The National Oilseed Processors Association (NOPA) said its members crushed 154.8 million bushels of soybeans in May, below an average of trade estimates for 162.5 million.

CBOT wheat futures closed firm, following corn and soybeans and bucking pressure from the start of the U.S. winter wheat harvest.

USDA said eight per cent of the winter wheat crop was harvested by Sunday, behind the five-year average of 20 per cent. Condition ratings remained relatively strong with 64 per cent of the winter wheat seen as good to excellent, up from 39 per cent a year ago.

Globally, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) lowered its forecast of 2019-20 wheat exports to 11.7 million tonnes, from 14.2 million previously, citing drought.

Export prices for 2019-20 Russian wheat were stable last week, with analysts forecasting a possible rise on continued dry and hot weather in the Black Sea region.

“You have pretty favourable weather in the EU, but we are still seeing hot and dry conditions in parts of Ukraine and Russia,” said Terry Reilly with Futures International in Chicago. “Wheat might be finding a little bit of support after Australia cut their outlook on exports.”

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Michael Hogan, Naveen Thukral and Colin Packham.

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