June 19 (Bloomberg) -- Corn futures surged the most in seven weeks on speculation that rain and cool weather during April and May reduced U.S. planted acreage and cut yield potential. Wheat and soybeans also gained.
Rainfall from March to May in Iowa, Minnesota, Wisconsin and Michigan was the most recorded in at least 119 years, the National Oceanic and Atmospheric Administration said in a report. Corn planting on May 26 was 86 percent complete, trailing the five-year average of 90 percent, which may have encouraged farmers to idle land for crop insurance payments or switch to soybeans that can be planted later, according to Greg Grow at Archer Financial Services Inc.
“The focus is on the uncertainty about the number of acres that did not get planted, and the potential yield losses from fields seeded after the middle of May,” Grow, the director of agribusiness at Archer Financial in Chicago, said in a telephone interview. “The U.S. crop probably will be smaller, and we will have to wait for July and August weather before we know how much smaller.”
Corn futures for delivery in December, after the U.S. harvest, climbed 3.6 percent to close at $5.705 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain for the contract since April 29. Corn for July delivery rose 1.3 percent to $6.8225, the contract’s highest close since March 27.
Wheat futures for delivery in September jumped 2.8 percent to $7.1425 a bushel on the CBOT, the biggest gain for the most-active contract since April 29. Soybean futures for delivery in November rose 1.6 percent to $13.1075 a bushel.
Grain and soybean prices accelerated gains after Memphis, Tennessee-based researcher Informa Economics Inc. said in a report to clients today that U.S. farmers planted less of the three crops this year than previously forecast by the firm, according to Lee Gaus, a managing partner for EFG Group LLC in Chicago.
Corn planting will fall to 95.262 million acres, compared with 97.282 million forecast by the U.S. Department of Agriculture in March, Informa said. Spring wheat may fall to 11.791 million acres from 12.701 million forecast by USDA, the researcher said. Soybeans were forecast at 77.756 million acres, compared with 78.286 million the company forecast in May and up from 77.198 million a year earlier.
Wheat prices also gained after French traders reported selling 200,000 metric tons of the grain to China, the biggest producer, according to Charles Sernatinger, the global head of grain futures at ED&F Man Capital Markets Inc. in Chicago. French exporters said the sale was for delivery from August to October and was $22 a ton cheaper than U.S. prices, Sernatinger said.
China may harvest 120.63 million tons of wheat this year, down from 121.9 million forecast in May because excessive rains damaged yields, China National Grain & Oils Information Center said June 13. U.S. exporters sold 180,000 tons to China last month, the USDA reported May 24. China has purchased 1.523 million tons of U.S. wheat for delivery before June 1, USDA data show.
“There has been talk about more Chinese purchases for several weeks because of the crop damage,” Sernatinger said. “Chinese buyers have also been asking for offers from Canada.”
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