Aug. 26 (Bloomberg) -- Corn and soybeans gained the most this month as reduced global production increases demand for supplies from the U.S., the biggest producer and exporter of the crops.
U.S. exporters sold 1.694 million metric tons of corn last week for delivery in the year starting Sept. 1, more than double the year-earlier total, the government said today. In the previous week, sales were 2.293 million tons, the most in 15 years. Soybean sales for delivery after Sept. 1 have already topped 14.7 million tons, the most ever before the start of a new marketing year.
“Exports were better than people were expecting as prices rose last week,” said Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis. “Demand is relentless for U.S. supplies.”
Corn futures for December delivery rose 12 cents, or 2.9 percent, to close at $4.32 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain since July 30. The most-active contract, which reached a 13-month high of $4.39 on Aug. 5, has gained 6.2 percent this month after Russia halted grain export for the rest of the year because of drought.
Soybean futures for November delivery rose 15.5 cents, or 1.6 percent, to close at $10.145 a bushel in Chicago, also the biggest increase since July 30. Yesterday, the price dropped to $9.935, the lowest level this month. On Aug. 5, the oilseed reached a seven-month high at $10.49.
Hot, dry weather in August has reduced the yield potential for crops that the U.S. Department of Agriculture predicts will be the biggest ever, said Dale Durchholz, the senior market analyst for AgriVisor LLC in Bloomington, Illinois.
Corn production will reach 13.365 billion bushels, up 1.9 percent from last year’s record the USDA said in an Aug. 12 report. A soybean crop of 3.433 billion bushels was projected, up 2.2 percent.
August temperatures in August have been 4.3 degrees Fahrenheit above normal in the Midwest, said Gail Martell, the president of MartellCropProjections.com in Whitefish Bay, Wisconsin. The heat can impede corn kernels from converting sugars into starch.
Below-normal August rainfall in soybean-growing areas from northeast South Dakota to northeast Ohio may also reduce yields, Martell said today in a report.
“The corn and soybean yields are going to be below the USDA forecasts,” Durchholz said. “The market is looking ahead to a tightening supply-and-demand situation” after the peak of harvesting is completed in late September and early October, Durchholz said.
Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, followed by soybeans at $31.8 billion, government figures show.
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