Corn Advances to Two-Year High on U.S., China Crop Concerns; Soybeans Jump

Corn advanced the highest in almost two years and soybeans traded at a 15-month high on concern flooding may damage crops in the U.S., the world’s largest exporter of both, and freezing weather in China. 

Corn for December delivery gained as much as 1 percent to $5.27 a bushel, the highest price for the most-active contract in Chicago since Sept. 29, 2008. November-delivery soybeans jumped as much as 1.6 percent to $11.4375 a bushel, the highest level for the most-active contract since June 5, 2009.

Western parts of the Midwest face further harvest delays this week as fields are very wet, and some areas remain flooded, Telvent DTN Inc. said in a forecast Sept. 24. Northeast China will likely have freezing conditions, after rain showers early this week, potentially hurting maturing soybean and corn crops, DTN said.

“There are so many concerns in the market right now,” Tetsu Emori, a commodity fund manager at Astmax Co. Ltd. in Tokyo, said by phone today. “That’s what’s attracting fresh investment into the commodity market. Hedge funds are seeing good trends in prices.”

As much as 40 percent of the crop in Minnesota, the fourth largest U.S. corn grower, may suffer reduced yields, Bob Zelenka, the executive director of the state’s Feed and Grain Association in St. Paul said last week.

Hedge-fund managers and other large speculators increased their net-long positions in Chicago corn futures in the week ended Sept. 21 to the highest since March 1996, according to U.S. Commodity Futures Trading Commission data.

Rising Bets

Speculative long positions, or bets prices will rise, outnumbered short positions by 465,714 contracts on the Chicago Board of Trade, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 21,625 contracts, or 5 percent, from a week earlier.

Net-long positions in soybeans rose 16,681 contracts, or 11 percent to 163,087 in the week ended Sept. 21, the most since May 1997.

Soybean planting in Brazil’s Mato Grosso and Goias areas will likely be delayed until they get enough rain to replenish soil moisture, DTN said Sept. 24.

December-delivery wheat gained as much as 1.4 percent to $7.2975 a bushel on the Chicago Board of Trade, extending its 3.3 percent surge in the previous session.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.ne

Wheat Advances on Concern Rainfall May Damage Canadian Harvest; Corn Drops

Wheat futures advanced, paring the weekly decline, on concerns excessive rains in Canada may damage crops in the world’s third-largest exporter. 

December-delivery wheat increased as much as 0.8 percent to $7.03 a bushel in Chicago Board of Trade before trading at $6.99 at 10:53 a.m. Singapore time, taking the weekly loss to 5.4 percent, the most for the most-active contract since May 14.

Harvests of crops including wheat, barley and canola in Saskatchewan, Canada’s biggest wheat-growing province, were 18 percent complete as of Sept. 20, behind the five-year average of 65 percent, because of “significant rainfall in most areas,” the government said in a report yesterday. Frost affected the growing areas on Sept. 17 and 18, it said.

“Rain potentially reduces the overall quality” of the grain, Michael Pitts, commodity sales director at National Australia Bank Ltd., said by phone from Sydney. “We may have disease problems as well.”

Corn for December delivery declined 0.5 percent to $4.97 a bushel in Chicago, and headed for a 3.1 percent loss this week.

Farmers in Argentina, the world’s second-largest corn exporter, will plant more than previously forecast this year as rains may increase yields for the next harvest, the Buenos Aires Cereals Exchange said yesterday.

The crop will cover 3 million hectares, more than the 2.93 million hectares predicted a week ago, the exchange said in its weekly report. About 13 percent of the area is planted, it said.

World corn stockpiles will tumble to a four-year low of 131 million tons at the end of 2010-2011, 4 million tons below last month’s forecast, on reduced estimates for output in the U.S. and Ukraine, the International Grains Council said yesterday.

The global crop will be a record 824 million tons, smaller than the 829 million tons predicted last month, the council said.

“Comparatively higher prices of feed-grade wheat and barley are expected to shift some demand to imported maize, especially in South Korea, the Philippines and Israel,” the council said, raising its estimate on corn use in livestock feeds by 6 million tons to 485 million tons.

November-delivery soybeans were little changed at $10.93 a bushel, taking the weekly gain to 2.3 percent.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

[Bloomberg] 

Corn Trades at More Than $5 a Bushel for First Time Since September 2008

Corn futures climbed above $5 a bushel for the first time in almost two years in Chicago on concern that falling yields in the U.S. and higher demand from importers will erode supplies in the world’s largest exporter.

December-delivery corn advanced as much as 3.2 percent to $5.1175 a bushel on the Chicago Board of Trade, the highest price for the most-active contract since Sept. 30, 2008, and was at $5.09 at 12:25 p.m. Paris time.

“The fundamentals for corn are quite bullish for the moment,” Chung Yang Ker, an analyst at Phillip Futures Pte., said by phone from Singapore today.

Rising demand for U.S. corn exports and lower-than-expected yields may reduce the nation’s stockpiles before next year’s harvest to about 7 percent of domestic demand, the second-lowest ratio on record, according to Rabobank analysts.

That will be smaller than the 15-year low for the stocks- to-use ratio of 9.8 percent forecast by the U.S. Department of Agriculture on Sept. 10.

Corn rose for a seventh session in Chicago, the longest winning streak since June 2008. The December contract is set for a 6.4 percent gain this week.

The USDA may pare its estimates of U.S. yields in the coming months, after a very hot summer, Rabobank analysts Luke Chandler and Doug White wrote in a Sept. 16 report.

The analysts forecast yields at 161 bushels an acre, taking the nation’s crop to 13 billion bushels, down from a record 13.11 billion bushels last season, and the government’s Sept. 10 estimate of 13.16 billion bushels.

‘Major Risk’

“Further erosion of corn-production estimates in the U.S. remains a major risk for the world feed-grain market in 2010- 2011,” the analysts wrote.

December-delivery wheat gained 2.1 percent to $7.34 a bushel in Chicago, paring a weekly loss. Milling wheat for November delivery on NYSE Liffe rose 2.2 percent to 233.75 euros ($306.49) a metric ton in Paris.

The outlook for winter-wheat planting in Russia is one of “doom and gloom” as main growing regions in the Volga and Southern Federal Districts received too little rain to relieve a drought, forecaster Martell Crop Projections said yesterday.

November-delivery soybeans climbed 1.6 percent to $10.525 a bushel, set for a 2 percent advance this week.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net.