Aug. 20 (Bloomberg) -- Corn gained on speculation rain in the U.S., the world’s biggest producer and exporter, will fail to improve yields after the worst drought in a half-century scorched crops. Soybeans rose to a one-week high.
Ten percent of the U.S. corn crop already reached maturity by Aug. 12, the final stage before harvest, and only 23 percent of fields were in good or excellent condition, the worst rating for the date since 1988, the Department of Agriculture said Aug. 13. The USDA will update its weekly crop progress report today. Parts of Illinois and Indiana had 2 inches (5.1 centimeters) of rain in the past seven days, National Weather Service data show.
“Recent rains across the U.S. Midwest has helped temper production fears, however the yield losses from drought earlier in the season are largely locked in,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a note today. Drought affects 87 percent of U.S. corn crops, the National Climatic Data Center said Aug. 16.
Corn for December delivery rose 0.7 percent to $8.1325 a bushel on the Chicago Board of Trade by 12:56 p.m. London time. Earlier today, the grain touched $8.1825, the highest price since Aug. 10, when the USDA slashed its production outlook for U.S. crops, sending prices as high as a record $8.49 a bushel.
Soybeans for November delivery climbed 0.8 percent to $16.585 a bushel, after earlier today touching $16.635, also the highest price since Aug. 10.
Corn output will drop to a six-year low of 10.78 billion bushels this year while soybean production may total 2.692 billion bushels, the least since 2007, according to the USDA.
Thunderstorms may bring rain to parts of Iowa and Illinois today, with additional showers from storms starting Aug. 23, according to the National Weather Service. Those are the two largest U.S. corn and soybean growing states.
December-delivery wheat fell 0.1 percent to $8.9325 a bushel in Chicago. In Paris, November-delivery milling wheat gained 0.2 percent to 263.25 euros ($323.93) a metric ton on NYSE Liffe.
Russia, the world’s third-biggest wheat exporter last season, may reap a smaller harvest than the 41.5 million tons gathered in 2010, when a severe drought spurred the country to halt grain exports for 10 months, Moscow-based researcher SovEcon said today in a report.
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