Soybeans reached a three-week high in Chicago and corn extended a rebound from a 35-month low on concern dry weather and frost may hurt plants in the U.S., the world’s biggest grower of both crops.
Little rain is forecast for the Midwest, meaning dryness concerns are likely to continue, DTN said today. Much of the soybean crop was sown late because of wet weather in May, and development slowed as temperatures in July were below average. Late-developing corn and soybeans will be at risk from early frost, according to Michael Cordonnier, president and owner of crop analyst Corn & Soybean Advisor Inc.
"Grain futures are higher due to lack of general rains across the Midwest," Paul Georgy, president of Allendale Inc., wrote in a market comment today. "Weather is a driver of soybeans, as late-August rains are very important to yields and overall production. The latest models are a little drier."
Soybeans for delivery in November gained 0.5 percent to $12.4575 a bushel at 6:52 a.m. on the Chicago Board of Trade, poised to rise for a fourth session. The oilseed touched $12.535, the highest since July 25.
Soybeans in northern Illinois on a low-humidity day yesterday afternoon were showing stress, while corn "looks great," Georgy said. Grains were supported by buying to close out bets on lower prices, fueled by concern about reduced yields, he said.
More than a third of Midwest corn and soybeans remains "notably dry," Commodity Weather Group wrote in a report today. Dryness will keep lowering yield potential for corn and particularly soybeans in affected areas, the forecaster said.
Corn for delivery in December rose 0.3 percent to $4.5675 a bushel. The grain advanced 1.8 percent yesterday after tumbling on Aug. 13 to $4.4575, the lowest since September 2010.
"U.S. weather will continue to be the driver for corn, with any adverse reports impacting production or harvest progress driving spikes in the market against a generally bearish outlook," Peter Ainsworth, senior adviser at Ikon Commodities Pty Ltd., said in an e-mail today.
The U.S. corn harvest will be a record 13.763 billion bushels, 28 percent more than in 2012, the Department of Agriculture said Aug. 12. Farmers will gather 3.26 billion bushels of soybeans this year, compared with the 3.42 billion bushels forecast in July, following excess rain in May and June that hurt yields, it said.