Soybeans, Corn Rise on Concern Dry Weather Will Hurt U.S. CropsJeff Wilson
Soybean futures rallied for a fourth straight day and corn rose on speculation that warmer, drier weather in the Midwest will increase stress on the two biggest crops in the U.S., the world’s largest grower.
Much of the Midwest will be drier over the next 10 days, with temperatures above normal for part of the period, based on midday data from the National Weather Service, said Joel Widenor, a vice president for Commodity Weather Group LLC in Bethesda, Maryland. About 25 percent of the corn and soybean fields will see stress after some areas received less than 50 percent of normal precipitation over the past 30 days, he said.
“The threat of hot, dry weather and how long it may last helped to increase buying” and will “boost the futures-market weather premium,” Shawn McCambridge, the senior grain analyst for Jefferies Bache LLC in Chicago, said in a telephone interview. “The biggest crop concerns are focused on the western Midwest, where rains have been more limited.”
Soybean futures for November delivery rose 0.5 percent to close at $12.9075 a bushel at 1:15 p.m. on the Chicago Board of Trade, capping for the first four-day advance since May 23. Prices have gained 5.1 percent this week, heading for the biggest weekly advance since August.
Corn futures for December delivery, after the harvest, advanced 1.1 percent to $5.27 a bushel. The most-active contract is up 7.3 percent this week, heading for the biggest gain since July 2012.
Earlier, prices fell after the U.S. said record domestic harvests in 2013 will more than double inventories, as farmers recover from a drought last year that sent prices to all-time highs.
Stockpiles of corn on Aug. 31, 2014, will total 1.959 billion bushels, up from 1.949 billion forecast in June and an estimated 729 million for this year, the U.S. Department of Agriculture said in a report. The agency also cut its export forecast. Soybean reserves will jump to 295 million bushels from this year’s estimate of 125 million, the USDA said.
After a drought last year that was the worst since the 1930s, growers will expand corn production by 29 percent to a record 13.95 billion bushels, the USDA said. Soybean output will jump 13 percent to an all-time high of 3.42 billion.