Corn futures rose for the first time this week on speculation that dry weather in Argentina and Brazil damaged crops. Soybeans fell as rain this week may boost yields in South America.
Global inventories of both crops will fall before the harvests in the Northern Hemisphere, and the U.S. Department of Agriculture probably will trim its output forecast for South America in a report tomorrow, a Bloomberg News survey showed. Argentina is the world’s second-biggest corn exporter, and Brazil is forecast to be the top soybean shipper this year, according to the USDA.
“People are making bets that smaller crops in South America will increase U.S. exports,” Don Roose, the president of U.S. Commodities Inc. in West Des Moines, Iowa, said in a telephone interview. “The markets will quickly turn their attention to the upcoming planting season, where we will need to grow bigger U.S. crops.”
Corn futures for March delivery rose 0.25 cent to close at $6.425 a bushel at 1:15 p.m. on the Chicago Board of Trade. The commodity has rallied 8.3 percent from this year’s lowest closing price on Jan. 18 as hot, dry weather threatened production in Argentina and Brazil. The U.S. is the top exporter.
Soybean futures for March delivery fell 0.5 cent to $12.315 a bushel. Earlier, the price reached $12.4475, the highest for a most-active contract since Jan. 3.
The heaviest rains of the growing season, with as much as 4 inches (10 centimeters) overnight, will aid crops in Argentina and move into southern Brazil tomorrow, the Commodity Weather Group LLC said in a report. Soybeans are planted after corn and benefit more from late-season precipitation.
“The rains are definitely stabilizing crop yields and keeping pressure on the market,” Brian Grete, the senior market analyst at the Cedar Falls, Iowa-based Professional Farmers of America newsletter, said in a telephone interview.
Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, USDA data show.