Corn and soybeans rose on speculation that adverse weather will reduce yield potential in Argentina and Brazil, boosting demand for U.S. supplies.
Hot, dry conditions in the next six days will increase stress on plants in parts of South America after below-normal rain in the past month reduced soil moisture, according to the Commodity Weather Group LLC. About half of Argentina’s corn and soybeans and a quarter of the crops in Brazil may be affected, the private forecaster said in a report.
“Concerns are growing about the South American crops,” said Mark Schultz, the chief analyst for Northstar Commodity Investment Co. in Minneapolis. “If the forecast rains fail to develop late next week, we could see a more dynamic rally because the crops are entering key development.”
Corn futures for March delivery rose 0.7 percent to close at $5.83 a bushel at 1:15 p.m. on the Chicago Board of Trade. The most-active contract was down 1.9 percent for the week. Yesterday, the price touched $5.7625, the lowest since Oct. 3, as rising global production reduced demand for U.S. supplies.
Soybean futures for March delivery climbed 1.6 percent to $11.395 a bushel on the CBOT, bringing the gain this week to 2.9 percent, the most in two months.
Prices also rose as concerns eased that Europe’s debt crisis will derail a global recovery and demand for food, animal feed and fuel made from the crops, Schultz said.
Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, government data show.