Corn rockets to 1-month highs
U.S. corn futures jumped more than 6% on Monday, their biggest percentage gain in nearly 10 months, amid fears that cold, wet weather in the Midwest will delay farmers planting a new crop.
Corn prices hit a one-month high as weather forecasts Monday projected rainfall in coming days in major corn-growing states such as Iowa and Illinois.
Late planting can cause rallies in corn prices because it reduces the expected output of the nation's crop by leaving the plants more vulnerable to damage from summer heat during corn's main growth stage. Delays also could lead some farmers to decide to plant soybeans instead of corn, reducing the amount of corn harvested in the fall and leading to tighter supplies.
May corn futures settled up 40 cents or 6.2% at $6.84 a bushel, the biggest percentage jump since July for the front-month contract.
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Corn futures for July and September delivery rose by the maximum daily limit allowed by the exchange, 40 cents a bushel. While May corn futures rose by the same amount, there is currently no limit on that contract because it will expire in about two weeks.
Corn futures received an extra lift Monday from speculative market participants scrambling to buy futures to exit soured bets that prices would fall, analysts said. Managed funds cut their bullish bets and increased their bearish bets on U.S. corn futures and options in the week through last Tuesday, regulatory data show.
"You caught all those people leaning the wrong way," said Jim Gerlach, president of A/C Trading Co., a Fowler, Ind., commodities brokerage. "You're definitely getting a knee-jerk reaction based off that."