April 9 (Bloomberg) -- Corn futures jumped the most in a month on signs that U.S. farmers are withholding grain from last year’s drought-reduced harvest, after prices dropped to a nine-month low. Soybeans gained, and wheat fell.
Ethanol processors in Cedar Rapids, Iowa, yesterday were paying a premium for deliveries this month of 46 cents a bushel above the price of May futures on the Chicago Board of Trade, compared with 40 cents a week earlier and 6 cents a year earlier, data compiled by Bloomberg show. Corn tumbled 14 percent from March 27 to April 5 after a government report showed bigger-than-expected inventories.
“The drop in corn prices has increased the incentive for farmers to hold onto their supplies and wait for higher prices,” Terry Reilly, a senior commodity analyst for Futures International LLC in Chicago, said in a telephone interview. Last week’s decline “also is spurring some new buying interest” from ethanol and livestock producers, Reilly said.
Corn futures for May delivery rose 1.7 percent to close at $6.4425 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain since March 8.
The grain tumbled 9.5 percent last week, the most since June, after the U.S. Department of Agriculture said domestic inventories were 8.1 percent bigger than analysts expected and that farmers would boost planting to the highest since 1936.
Prices also rose today on speculation that cold, wet weather may delay timely planting in the U.S., the world’s largest producer and exporter.
Corn farms in the Midwest, the main growing region, may get as much as 2 inches (5.1 centimeters) of rain in the next five days, and cooler temperatures in the 11-to-15-day forecast may slow planting, Commodity Weather Group said today in an e-mailed report.
Soybean futures for May delivery advanced 1.3 percent to $13.955 a bushel, the biggest gain since March 21.
Wheat fell after a government report showed U.S. crop conditions improved last week, Reilly said.
About 36 percent of the winter-wheat crop was rated good or excellent as of April 7, compared with 34 percent a week earlier, the USDA said yesterday. The U.S. is the world’s biggest exporter. World wheat inventories before this year’s Northern Hemisphere harvest may be 178.82 million metric tons, higher than the 178.23 million estimated last month, a Bloomberg survey showed before a USDA report tomorrow.
Wheat futures for May delivery slid 0.5 percent to $7.0875 a bushel, the first decline in three sessions. Futures for July delivery, after the harvest, fell 0.5 percent to $7.14.
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