Soybeans, Corn Advance as Drought May Persist in U.S. Midwest

Soybeans gained on speculation that a 1 percentage point improvement in U.S. crop conditions won’t ease supply concerns as drought persists in the Midwest.

Soybeans for November delivery advanced as much as 0.5 percent to $16.09 a bushel on the Chicago Board of Trade, and were at $16.0425 at 2:15 p.m. Singapore time. Corn for December delivery rose as much as 0.7 percent to $7.975 a bushel and last traded at $7.9575.

Less rain than normal will probably fall from Montana to western New York, including the Midwest, from Aug. 18 to 22, according to Joel Widenor, the co-founder of Commodity Weather Group LLC. Soybean crop conditions remained at the worst level since 1988, with 30 percent rated good to excellent in the week to Aug. 12, up from 29 percent a week earlier, the U.S. Department of Agriculture said yesterday.

“We would caution that the improvement in crop conditions is small and does not change the overall bleak supply outlook,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a report today.

The U.S. soybean harvest, the world’s largest, will total 73.3 million metric tons in the year beginning Sept. 1, down from 83.2 million tons a year earlier, and smaller than the 83 million tons forecast last month, the USDA said Aug. 10.

The share of the U.S. corn crop that’s rated poor to very poor expanded to 51 percent in the week ended Aug. 12, from 50 percent a week earlier. About 23 percent of the crop got the top ratings, unchanged from a week earlier and the smallest since 1988, according to the USDA.

U.S. corn production will fall to 10.779 billion bushels (273.8 million tons) in the year beginning Sept. 1, from 12.358 billion bushels a year earlier, the USDA said Aug. 10, paring its output estimate by 17 percent from last month. Yields will average 123.4 bushels per acre, down from 146 bushels estimated in July and less than 147.2 last year, the USDA said.

Wheat for December delivery rose as much as 0.6 percent to $8.8125 a bushel and was last at $8.81.

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