Chicago | Reuters — U.S. corn and soybean futures rallied on Monday on concerns that the slowing pace of harvest in the U.S. Midwest will delay deliveries of much-needed supplies, traders said.
“We have got a wetter forecast,” said Bill Gentry, a broker at Risk Management Commodities in Lafayette, Indiana. “That is definitely going to cramp the style for some harvest activity. It could just take these guys forever to get this job done.”
The 3.3 per cent gain in soybean futures was the biggest since Sept. 13, 2013.
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Analysts were expecting a U.S. Agriculture Department report on Monday afternoon that the corn harvest had advanced just eight percentage points and the soybean harvest 13 percentage points in the past week because of wet conditions in the fields.
More rain was in the forecast for the eastern Corn Belt later this week, which will keep farmers in Ohio, Indiana and Kentucky from running combines. Southern areas also were expecting several inches of rain caused by the remnants of Tropical Storm Simon.
“Harvest progress is going to be slowed to a standstill late this week in the far southern Midwest and northern Delta,” said Josh Senechal, a meteorologist at Freese-Notis based in Iowa.
Chicago Board of Trade soybeans for November delivery settled 30 cents higher at $9.42-1/4 a bushel, while CBOT December corn ended 9-1/4 cents up at $3.32-1/2 a bushel (all figures US$).
Traders also noted some short-covering as traders staked out positions ahead of the USDA’s monthly supply and demand report on Friday.
Wheat also advanced, rising to the highest level since Sept. 18 as a slowing of deliveries from Russia boosted demand for U.S. exports.
CBOT December soft red winter wheat gained 5-3/4 cents to $4.91-1/2 a bushel.
Russian wheat has made a surprise early exit from key global export markets, despite the country’s near-record crop, after domestic prices rose in the fallout from the Ukraine crisis. [Related story]
A sharp drop in the U.S. dollar, which makes U.S. commodities more attractive to overseas buyers, as well as investors seeking a hedge against inflation, added to the strength in grains. The U.S. dollar index posted its biggest one-day drop since January on Monday, spiralling lower on profit taking after 12 straight weeks of gains that pushed it to a four-year high.
“You have that big of a percentage move up or down in the dollar, it impacts other markets,” said Jason Britt, president of Central States Commodities. “You have a little bit of that at play.”
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Nigel Hunt in London.
