U.S. grains: Prices advance on crop, weather worries

(Lisa Guenther photo)

Chicago | Reuters — U.S. grain and soybean futures jumped on Wednesday as concerns about poor weather hurting autumn harvests fuelled a recovery from recent losses in the markets.

The U.S. Department of Agriculture, in a crop report on Aug. 12, may trim its U.S. soybean acreage and ending stocks estimates because of excessive rains that disrupted spring plantings, traders said.

Traders were also keeping an eye on weather forecasts amid worries that some growing areas may turn too dry during an important period for soybean development this month.

“Additional risk premium is being added to corn, wheat and soybean futures ahead of critical U.S. supply updates from the USDA,” Chicago-based agricultural consultancy AgResource Co. said in a note.

Chicago Board of Trade September soybeans unofficially closed up 16 cents at $9.92 a bushel, and November soybeans were up 10-3/4 cents at $9.53 (all figures US$). September wheat unofficially closed nine cents higher at $5.02-1/2, while September corn was up four cents to $3.72-3/4.

Prices increased after the front-month wheat and corn contracts traded at their lowest levels in more than a month on Monday. Last week, the nearby soybean contract dropped to its lowest level in more than a month.

For soybeans, “these little recovery rallies are not unexpected, but they are generally selling opportunities,” said Tomm Pfitzenmaier, analyst at Summit Commodity Brokerage in Iowa. Export demand for U.S. soybeans has been slow, and U.S. growing conditions generally look good for August, he added.

Private analytical firm Informa Economics projected U.S. soybean production at 3.789 billion bushels, up from its July 8 estimate of 3.77 billion, traders said. The company left its corn production estimate unchanged at 13.412 billion bushels.

The figures compare with USDA’s latest estimates for a corn crop totalling 13.530 billion bushels and a soybean crop of 3.885 billion bushels.

“Corn traders continue to debate U.S. yields, but the weather forecasters are providing little hope for the bulls,” said Kevin Van Trump, chief executive of Missouri-based consultancy Farm Direction. “Most weather models are showing very little in the way of complications.”

In the wheat market, Egypt, one of the world’s largest wheat importers, said it bought 120,000 tonnes of Russian wheat in a tender.

U.S. wheat is seen as too expensive to be competitive on the export market.

On Thursday, traders will digest weekly U.S. grain export sales data from the USDA.

Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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