Weather threats send grains higher
U.S. grain and soybean futures settled higher Wednesday, boosted by a threat to Midwest crops from hot, dry weather forecasts.
Chicago Board of Trade September corn settled up 14 1/4 cents, or 2.9%, at $4.98 a bushel, a three-week closing high. September soybeans rose 23 3/4 cents, or 1.8%, to $13.33 a bushel.
Forecasts call for limited rain in the Midwest over the next week or more, leaving traders worried about dry soil conditions in parts of Iowa, Illinois and Missouri. Temperatures are also expected to be high for the next two weeks, which could further dry out soils.
Traders are particularly worried about the unfavorable weather since soy crops are going through key stages of growth, including setting pods and filling them out with beans. Most of the U.S. corn crop has already completed its most crucial stage, pollination, but inclement weather still threatens to reduce crop yields.
"Rains are returning to the northwestern Midwest, but only very isolated improvements are expected," mainly in northeastern Nebraska and western Iowa, wrote MDA Information Systems LLC in a forecast note. "Rain amounts elsewhere should be rather light. This will allow moisture shortages and stress to continue on corn and soybeans."
Soybean futures also benefited from continued strong signs of export demand for soy products. Vietnam has brought three cargoes of U.S. soymeal totaling around 120,000 metric tons for shipment in October, November and December from Omaha-based farmers' cooperative Ag Processing Inc., trading executives said Wednesday.
A slowdown in Brazilian shipments of soybean meal has "has forced many buyers to turn to the U.S. for soybean meal regardless of price," said Terry Reilly, senior commodity analyst with Futures International in Chicago.
Wheat was pulled higher by the gains in corn and soybeans. But its gains were limited by higher-than-expected Canadian government estimates for that country's wheat production this year. Statistics Canada estimated national wheat production of 30.562 million metric tons, which would be up 12% from last year.
CBOT September wheat rose 4 1/2 cents, or 0.7%, to $6.38 3/4 a bushel. KCBT September wheat rose 2 3/4 cents, or 0.4%, to $6.99 1/2 a bushel. MGEX September wheat fell 6 1/4 cents, or 0.9%, to $7.28 3/4 a bushel, pressured by the Canada wheat estimates.
-Sameer C. Mohindru contributed to this article.
Write to Owen Fletcher at email@example.com
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(END) Dow Jones Newswires
August 21, 2013 15:09 ET (19:09 GMT)
DJ UPDATE: U.S. Grains, Soybeans Rise on Hot, Dry Weather Outlook->copyright
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