Corn Rises in Chicago as Rains May Fail to Reverse Crop Losses
Corn rose in Chicago on speculation rains forecast for parts of the U.S. may fail to reverse crop losses caused by the worst Midwest drought in at least a generation. Soybeans also gained.
Areas of Indiana and Ohio had as much as 0.75 inch of rain yesterday, and parts of the eastern Corn Belt may receive an inch tomorrow, Telvent DTN said. While rain may ease crop stress, “this will not be a drought-breaking situation,” the forecaster said. As of July 22, 86 percent of the corn crop already entered the silking stage, critical for determining yields, Department of Agriculture data show.
“Even with these rains, in a lot of areas it could be too little, too late” for corn, Christopher Narayanan, head of agricultural commodity research at Societe Generale SA, said by telephone from New York. “Beans still have another week or two to recover if we get some good rains, because pod filling is just now starting. You have a little bit of time, but not a whole lot.”
Corn for December delivery gained 1.1 percent to $7.87 a bushel on the Chicago Board of Trade by 12:33 p.m. London time. Futures jumped to a record $8 on July 23 as the USDA said crop conditions were the worst since 1988.
Soybeans for November delivery rose 0.5 percent to $15.7725 a bushel. About 36 percent of the U.S. soybean crop was in the pod-setting stage as of July 22, according to the USDA.
Midwest temperatures may be as much as 8 degrees Fahrenheit above normal for at least the next two weeks, with below normal rains, Joel Widenor, co-founder of Commodity Weather Group LLC, said in a note yesterday. About 55 percent of the contiguous U.S. was in moderate to extreme drought at the end of June, the highest percentage since 1956, National Climatic Data Center figures show.
“Severe drought conditions persist across most production regions,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia (CBA), said in a report today. “The USDA is expected to substantially cut its U.S. production next month given the ongoing decline in crop conditions.”
The next USDA estimate is due on Aug. 10.
Corn yields from the eastern third and north-central parts of Iowa, the biggest U.S. producing state, were 33 percent smaller than measured a year earlier, according to results from field inspections on the second day of the annual Doane Advisory Services Co. crop tour.
Wheat for September delivery rose 1.2 percent to $8.895 a bushel. In Paris, November-delivery milling wheat increased 2.6 percent to 257.50 euros ($312.73) a ton on NYSE Liffe.
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