Wednesday, July 10, 2013

Corn climbs most in 10 weeks on crop outlook

By Jeff Wilson and Luzi Ann Javier

Corn climbed the most in 10 weeks and soybeans rallied as dry, warm weather increases the risk of damage to crops in the U.S., the world’s largest grower. Wheat also gained.

About 25% of corn and soybean fields will see an increase in moisture stress over the next 10 to 15 days, mostly south and west of Des Moines, Iowa, Joel Widenor, a vice president at Bethesda, Maryland-based Commodity Weather Group LLC, said in a telephone interview. Temperatures will be near 95 degrees Fahrenheit (35 Celsius) as corn begins to pollinate and soybeans start flowering from Kansas to North Dakota after July 13, Widenor said.

“Corn and soybeans are bouncing higher because the warmer, drier weather increases the risk for lower U.S. yield potential,” Joseph Vaclavik, the president of Standard Grain Inc. in Chicago, said in a telephone interview. “Farmers are worried about crops because they planted late.”

Corn futures for delivery in December, after the U.S. harvest, rose 4.2% to close at $5.2175 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain for the most-active contract since April 29.

Soybean futures for delivery in November added 1.9% to $12.7625 a bushel in Chicago, after touching $12.8675, the highest since June 20. Soybean-meal futures for delivery in December advanced 2.9% to $378.90 for 2,000 pounds.

Corn Estimate

Domestic farmers will probably reap 13.983 billion bushels of corn this year, less than the 14.005 billion predicted by the U.S. Department of Agriculture last month, based on the average estimate of 20 analysts and trading firms surveyed by Bloomberg. The USDA is due to update its outlook on supply and demand at noon on July 11.

“If the USDA reduces its supply estimate as hot weather stresses crops, we’re looking at higher prices,” Tetsu Emori, a commodity fund manager at Astmax Asset Management Inc., said by telephone from Tokyo today.

A strike at Argentina’s Timbues/San Lorenzo port is slowing grain and oilseed exports, Guillermo Wade, a port official from Rosario, said by telephone. Farmers in Argentina, the world’s largest soybean-meal shipper, also went on strike last month, halting sales of grains and livestock to protest government policies, including a tax increase on cereal and oilseed exports.

“China is probably struggling to import soybeans and soybean meal after the Argentine strike,” Emori said. The Asian nation is the largest consumer of soybeans and the meal used to feed livestock and poultry.

Wheat futures for delivery in September rose 2.2% to $6.775 a bushel on the CBOT, the biggest gain since June 19. China yesterday boosted purchases from the U.S., the world’s biggest exporter.

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