Corn futures rose, capping for the longest rally in a year, as dry weather depletes soil moisture and increases crop stress in South America, boosting demand for shrinking U.S. supplies. Wheat also advanced, and soybeans fell.
Parts of Argentina, Paraguay and southern Brazil will have dry conditions in the next 10 days, Mike Tannura, the president of T-Storm Weather LLC in Chicago, said in a telephone interview. Rain will be needed by late January to prevent crop damage after parts of Brazil and Argentina got less than 60 percent of normal rain since Dec. 1, he said.
“South American weather is less than ideal for big crops,” Jerry Gidel, the chief feed-grain analyst at Rice Dairy LLC in Chicago, said in a telephone interview. “If it’s still dry at the start of February, there could be some real yield losses.”
Corn futures for March delivery rose 0.9 percent to close at $7.305 a bushel at 2 p.m. on the Chicago Board of Trade. The price climbed for the seventh straight session, the longest rally since Dec. 28, 2011. Earlier, the grain reached $7.345, the highest for a most-active contract since Dec. 17.
Inventories of corn as of Dec. 1 fell to the lowest in nine years for that date, the U.S. Department of Agriculture said on Jan. 11. The grain surged to a record $8.49 on Aug. 10 after the worst drought since the 1930s reduced Midwest production.
Wheat futures for March delivery jumped 2.1 percent to $7.8275 a bushel in Chicago. The price rose for the third straight session, the longest rally since Nov. 28, as drought and cold threatened U.S. winter plants.
Temperatures may fall as low as minus 10 Fahrenheit (minus 23 Celsius) as far south as Kansas and Illinois, increasing risk for damage to crops without a blanket of snow protection, Tannura of T-Storm Weather said. The U.S. Drought Monitor showed severe to exceptional drought conditions on 86 percent of the six-state Great Plains region as of Jan. 8.
Soybean futures for March delivery fell 0.3 percent to $14.135 a bushel. Earlier, the oilseed reached $14.3625, the highest since Dec. 26.