Soybeans and corn advanced on speculation that rains forecast in the U.S. won’t revive plants that have been parched by drought in the world’s largest grower. Wheat also gained.
Thirty-nine percent of the U.S. soybean crop was in poor to very poor condition as of Aug. 5, compared with 37 percent a week earlier, the Department of Agriculture said yesterday. For corn, 50 percent got the lowest ratings, up from 48 percent a week earlier. Temperatures across the Midwest may cool to near normal this week, while storms may bring “moderate rainfall” to much of the region by midweek, AccuWeather Inc. said.
“Cooler and wetter conditions show potential to lift ratings, yet we view this as merely halting the yield slide,” Wayne Gordon, a strategist at UBS AG in New York, said in a report e-mailed today. Traders are looking toward the USDA’s monthly crop production report on Aug. 10 for confirmation of yield declines, he wrote.
Soybeans for November delivery gained 0.7 percent to $15.96 a bushel on the Chicago Board of Trade as of 1:29 p.m. in London. The most-active contract reached an all-time high of $16.915 on July 23 as the USDA said crops were in the worst condition since 1988.
Corn for December delivery rose 0.2 percent $8.07 a bushel. The most-active contract touched a record $8.205 on July 31.
Drought may have slashed U.S. corn production to 10.792 billion bushels, 17 percent less than the USDA’s July forecast of 12.97 billion, according to Doane Advisory Services Co. Soybean output may total 2.73 billion bushels, below a USDA estimate of 3.05 billion, the St. Louis-based researcher said Aug. 3.
“The corn crop is past salvation,” because the grain matures earlier than soybeans, economist Dennis Gartman wrote today in his daily Gartman Letter. “It is lost, and the only question before us is whether the crop deterioration shall take the total crop size below 11 billion bushels, or just above that psychological level.”
Wheat for December delivery rose 0.7 percent to $9.13 a bushel. The most-active price reached $9.4725 on July 23, the highest since August 2008. In Paris, milling wheat futures for November delivery gained 0.7 percent to 260.25 euros ($323.73) a metric ton on NYSE Liffe.
Dry weather may limit production in the former Soviet Union, meaning European wheat may gain global export market share, Goldman Sachs Group Inc. said. The bank recommended buying March 2013 wheat in Paris against contracts of the same delivery month in Chicago, according to an e-mailed report today.