Soybeans and corn rose to the highest levels in more than a month as downpours in the U.S. raised the potential for crop damage in the world’s biggest producer.
Parts of the Midwest received more than six times the normal rainfall in the week through Monday, the National Weather Service said. Farmers are planting soybeans at the slowest pace for this time of year since 1996 and the wheat harvest is making the least progress in almost two decades.
Corn and soybean prices have fallen over the past year as global output headed for a record. Soybeans, used for cooking oil and livestock feed, lost 22 percent while corn dropped 17 percent. Forecasters say an El Nino weather pattern is strengthening, which may bring a wetter summer to some parts of North America. Citigroup Inc. says returns from grains could rise by as much as 25 percent.
“U.S. farmers are somewhat late planting soybeans this year, which is prompting concerns that their yields will be below normal,” Tobin Gorey, an analyst at Commonwealth Bank of Australia, wrote in a note.
Soybeans for November delivery in Chicago added as much as 0.9 percent to $9.68 a bushel, the highest level for a most-active contract since May 12, before trading at $9.6125. Corn for September delivery gained as much as 1.6 percent to $3.70 a bushel, the highest since May 18. Wheat for delivery the same month advanced as much as 1.6 percent to $5.14 a bushel, the highest since June 12.
Grain returns rise by as much as 10-25 percent during El Nino cycles because of damage to staple food crops, Citigroup analysts including Aakash Doshi and Ed Morse wrote in a report dated June 16.
States including Illinois, Missouri, Indiana and Ohio had less than two days suitable for fieldwork last week, the U.S. government said. The Chicago Board of Trade declared a condition of force majeure for grain deliveries on Wednesday as many shipping stations on the Illinois River couldn’t load.
Further rains were reported in parts of the Midwest. A large complex of fast-moving thunderstorms caused widespread damage to developing corn crops in some areas, according to Don Keeney, senior agricultural meteorologist at MDA Weather Services in Gaithersburg, Maryland, on Monday.
Corn planting will trail government estimates after the rains, according to Roach Ag Marketing Ltd., an industry adviser based in Boca Raton, Fla.
Ninety percent of the soybean crop was planted as of June 21, the slowest pace since 1996, U.S. Department of Agriculture data show. Nineteen percent of the winter-wheat crop was harvested, the lowest since 1997. Soybeans have rebounded 7.3 percent from a five-year low earlier this month.
Milling wheat futures for December delivery traded on Euronext in Paris rose 0.8 percent to 185 euros ($208) a metric ton. Soybean meal for delivery the same month traded in Chicago fell 0.5 percent to $316.40 for 2,000 pounds.