Too much rain in the U.S. and not enough in Europe has sparked the biggest weekly rally in wheat and corn prices in three years.
Wheat jumped 12 percent in Chicago this week, while corn climbed 8.3 percent and milling wheat added 6.9 percent in Paris. All three increases are the largest since 2012. The most- active contracts rose at least 1.4 percent as of 7:02 a.m. in New York.
Downpours across the U.S. Midwest and Plains are eroding grain quality, while fields in France and Canada have been parched by heat and dry weather. The El Nino developing across the Pacific risks cutting Australia’s wheat crop to the smallest in eight years, according to National Australia Bank Ltd.
“There are problems pretty much everywhere, and they intensified this week,” said Paul Gaffet, a wheat analyst at Offre & Demande Agricole in Bourges, France.
Parts of the U.S. Midwest received three times more rain than usual in June, according to government data. U.S. winter wheat classified as good or excellent fell to 41 percent of the crop as of June 21, down 2 points from a week earlier, the U.S. Department of Agriculture reported on Monday.
Wheat for September delivery rose 2.5 percent to $5.51 a bushel in Chicago on Friday. Corn for the same month rose 1.4 percent to $3.88 a bushel.
Crops in parts of Europe and Canada aren’t getting enough rain and the hot weather can reduce yields. Top soils were dry in Saskatchewan, Canada’s biggest wheat-growing region, with crop development delayed, according to the province’s agriculture ministry.
In France, Europe’s biggest wheat and corn grower, maximum temperatures in the south and center regions may exceed 35 degrees Celsius (95 Fahrenheit) from Wednesday, Meteo-France predicts. Soft wheat in good or very good condition made up 81 percent of the crop in the week through June 22, down from 85 percent the previous week, data from FranceAgriMer show.
Milling wheat rose 2.6 percent to 192.50 euros ($215.56) a metric ton in Paris.
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