June 3 (Bloomberg) -- Wheat advanced for a second day to trade at the highest level in almost three weeks as wet weather raised the risk of damage to U.S. winter crops. Corn and soybeans also gained.
Much of the northern Great Plains and central Midwest from North Dakota to Arkansas had more than double the normal amount of rain in the past two weeks, National Weather Service data show. Some areas may see 1 inch (2.5 centimeters) of rain by June 5, QT Weather said in a report. Thirty-one percent of U.S. winter wheat crops grown in the Midwest and Plains were in good or excellent condition May 26, down from 54 percent that got the top ratings a year earlier, the U.S. Department of Agriculture said. The agency will update its crop condition report today.
"Excessive moisture across the Midwest has raised concerns for disease-related yield losses" for soft, red winter wheat grown in the Midwest, Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a report today.
Wheat for delivery in July climbed 1 percent to $7.125 a bushel by 7:27 a.m. on the Chicago Board of Trade. Earlier the price touched $7.145, the highest for a most-active contract since May 14. In Paris, milling wheat for November delivery rose 1.8 percent to 209.75 euros ($273) a metric ton on NYSE Liffe.
Areas of central Europe including parts of Germany, the Czech Republic and Austria were experiencing flooding after recent storms, disrupting river traffic on the Rhine and Danube. Germany is Europe’s second-biggest wheat grower and may overtake France this year as the biggest producer of rapeseed, according to Hamburg-based researcher Oil World.
"Overall risk to winter and spring crops in these regions should be limited to areas surrounding swollen rivers," Jaime Nolan-Miralles, a commodity risk manager with INTL FCStone in Dublin, said in an e-mailed report today.
Corn for delivery in December rose 0.8 percent to $5.72 a bushel in Chicago, extending last week’s 5.7 percent increase. Soybeans for July delivery gained 1.6 percent to $15.3425 a bushel. Trading volumes for soybean futures were 46 percent higher than the average for the past 100 days for this time of day, according to data compiled by Bloomberg.
Corn planting was 86 percent complete in the main U.S. growing areas as of May 26, compared with the previous five-year average of 90 percent, according to the most-recent USDA data. Farmers had finished sowing soybeans on 44 percent of fields, compared with the normal pace of 61 percent.
Excess rainfall in the U.S. spurred Morgan Stanley today to cut its forecast for planting to 93.5 million acres. That compares with the USDA’s estimate at 97.3 million acres, the most since 1936. Flood warnings were in place for parts the Illinois and Mississippi rivers and their tributaries, according to the National Weather Service.
"Rainy weather is starting to have a material impact on corn-planted area," Morgan Stanley analysts including Adam Longson said. "Farmers in the northern states are more likely to claim insurance on acres not completed by the end of May, owing to the shorter growing season."
--With assistance from Phoebe Sedgman in Melbourne. Editors: John Deane, Sharon Lindores
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