U.S. grains: Corn hits one-year high on supply outlook, crop conditions

Chicago | Reuters — U.S. corn futures rose on Monday for the fifth straight session, hitting a one-year high on better-than-expected demand and as heavy rains limited the yield potential of the new crop.

The U.S. Department of Agriculture, in a monthly report issued Friday, surprised investors, showing corn and soybean supplies at levels smaller than anticipated, sending prices higher for each crop.

Expectations that a USDA weekly report on Monday would reduce condition ratings due to heavy rains also buoyed corn and soybean futures at the Chicago Board of Trade.

“(Corn) stocks are expected to be lower and wet weather is hurting the crop,” said Kaname Gokon, general manager of research at brokerage Okato Shoji in Tokyo.

USDA, in a report issued after the close of trading, cut soybean ratings by one percentage point but left corn conditions unchanged.

Warmer temperatures in the U.S. were likely to benefit developing corn and soybean plants but rains also moved through northern and central portions of the Midwest crop belt, leaving unneeded moisture after record precipitation in May and June.

CBOT September corn finished 5-1/4 cents higher at $4.40 per bushel, highest since July 3, 2014 (all figures US$). Soybeans for August delivery ended 5-1/2 cents higher at $10.37-1/2, rising for the fourth straight session.

Wheat futures were mostly lower, pressured by a higher dollar and lacklustre export demand for U.S. supplies.

CBOT September wheat was 1/4 cent lower at $5.75-3/4 per bushel while MGEX September spring wheat fell 10-1/2 cents, 1.7 percent, to $5.97.

USDA on Friday increased global wheat supplies by more than 12 million tonnes and projected U.S. ending stocks to the highest levels in five years.

“Given what we saw out of the USDA report last week, wheat should be under pressure,” said CHS Hedging analyst Joe Lardy.

Top global wheat importer Egypt last week purchased Russian and Ukrainian supplies, with U.S. grain priced more than $50 per tonne than the grain shipped out of the Black Sea region.

Egypt issued another tender on Monday, seeking wheat for shipment between Aug. 21-31.

A higher dollar was seen as expanding the competitive disadvantage for U.S. wheat in global markets.

“We’re not competitive — we’re more than a country mile away,” Lardy said.

Michael Hirtzer reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Sinagpore.

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