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Grains rocket on exports, planting data

08/15/2013 @ 3:36pm

U.S. corn futures rallied Thursday, fueled by worries about unplanted acreage and unfavorable weather forecasts. Stronger-than-expected recent exports also supported futures.

Market participants are closely watching for new insight into the development of this year's crop, as corn stockpiles remain historically low after severe drought last year reduced production and depleted inventories. Also, heavy spring rains delayed plantings this year, causing some concern that an early or even on-schedule frost could cut yields for both corn and soybeans.

Corn futures for September delivery settled up 16 3/4 cents, or 3.6%, at $4.81 1/2 a bushel, a two-week high, at the Chicago Board of Trade.

The move marked the largest percentage gain in corn futures in a single day since May 13.


Futures drew strength from U.S. Department of Agriculture data showing farmers were prevented from planting 3.4 million acres of corn this year. The USDA previously estimated this year's total corn plantings at 97.4 million acres.

Analysts already knew rainy spring weather had prevented some farmers from planting crops, but the figures Thursday were higher than some had expected, sparking worries about lower production and higher prices this year.

"That's a headline-grabbing number and that's a good deal of why we're up," said Bryce Knorr, an analyst with agricultural publication Farm Futures. "It gives us another indication that harvested acres are going to be significantly less than what USDA forecasts."

The size of this year's harvest is also threatened by forecasts for dry weather and a turn to hotter temperatures in the next two weeks. Little to no rain is expected in the next five days in most of the Corn Belt, and temperatures are expected to heat up next week.

Most of the U.S. corn crop has already completed its crucial pollination phase, which determines the number of kernels on each ear of corn. But hot, dry weather later in the growing season can also reduce yield expectations.

Corn futures also rose on better-than-expected export sales in a weekly government report Thursday. The U.S. Department of Agriculture reported net export sales of corn in the week through Aug. 8 totaled 777,000 metric tons. Analysts had expected total net sales of 300,000 to 600,000 tons.

U.S. soybean futures also got a lift from the weather forecast.

Traders are concerned that the dry weather expected in the Midwest in coming days will affect soybean crops just as they are going through key stages of growth including setting pods and filling them out with beans. Unfavorable weather during that period would reduce expectations for crop yields.

September soybeans rose 18 3/4 cents, or 1.5%, to $12.88 1/4 a bushel.

The pace of export sales this year for the new crop of soybeans has also far exceeded some analysts' expectations, driving soybean prices higher for both nearby and deferred futures. The USDA reported Thursday morning that net soybean export sales in the week through Aug. 8 totaled 1.883 million tons, above the 600,000 to 1.1 million expected by analysts.

U.S. wheat futures followed corn prices higher Thursday.

CBOT September wheat rose seven cents, or 1.1%, to $6.37 1/2 a bushel. KCBT September wheat rose 4 1/4 cents, or 0.6%, to $7.03 a bushel. MGEX September wheat rose 3 1/2 cents, or 0.5%, to $7.39 1/2 a bushel.

Many analysts expect wheat prices to remain closely linked to corn in coming weeks, until the likely size of this year's corn harvest becomes more apparent. A better corn crop than currently expected would reduce demand for wheat used in animal feed and weigh on wheat prices.

Write to Kelsey Gee at kelsey.gee@dowjones.com and Owen Fletcher at owen.fletcher@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 15, 2013 15:27 ET (19:27 GMT)
DJ U.S. Corn, Soybeans Rise on Unplanted Acreage Estimate, Weather->copyright

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