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U.S. grains: Corn, soy prices soar as storms drench U.S. Midwest

Wheat higher on U.S. harvest delays, Prairies' dryness

(Photo courtesy ARS/USDA)

Chicago | Reuters — U.S. corn futures hit their highest level in two months and soybeans topped US$10 a bushel on Thursday on concerns about excessive rains in the U.S. Midwest curbing yield prospects, traders said.

Wheat set a two-week high as the wet weather slowed the U.S. soft red wheat harvest, while dry weather in Canada’s Prairies lent additional support.

At the Chicago Board of Trade, July corn settled up 10 cents at $3.76-1/2 a bushel after reaching $3.77, its highest since April 24 (all figures US$).

July soybeans ended up 18-1/2 cents at $10.00-1/4 a bushel after reaching $10.02-1/2, and July wheat rose 14 cents at $5.32 a bushel.

Storms crossing the U.S. Corn Belt in the last day dumped up to 17.8 cm of rain in parts of Iowa and Missouri, and another system was poised to soak Missouri through southern Ohio later this week.

Normally rains in June are a benefit to the region’s crops. But frequent showers this month have swamped fields in parts of Missouri, Illinois and Indiana, raising fears of lost yield potential.

“With those big rains overnight, we have expanded the saturated areas of the Midwest, upping the odds that crop ratings will likely shrink again on Monday,” said Rich Feltes, vice-president of research for R.J. O’Brien.

The price rally comes less than a week ahead of two hotly anticipated reports due June 30 from the U.S. Department of Agriculture on U.S. acreage and quarterly grain stocks.

Commodity funds hold a net short position in CBOT corn, soybeans and wheat, leaving the markets vulnerable to short-covering ahead of the reports.

“Your managed fund short seems to be caught in a vortex of too much rain, the approach of a high-risk crop report (and) positive chart action,” Feltes said.

Open interest in CBOT corn futures has been dropping since June 10 and fell by 23,000 contracts during Wednesday’s session, a possible sign of fund short-covering.

Wheat futures followed the higher trend as technical buying and worries about harvest delays in the Midwest overshadowed the expanding harvest of hard wheat in the southern Plains.

Traders also noted concerns about dry conditions in Canada’s Prairie wheat belt.

“Limited rains in the Prairies through early next week will allow moisture shortages and wheat stress to build further,” MDA Weather Services said in a note to clients.

Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Sybille de La Hamaide in Paris.

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