Chicago | Reuters — Chicago soybean futures rallied on Monday to a nearly seven-month high on reports of dry weather in the United States, while corn futures hit their highest in a month on fresh concerns over damage from a storm in Iowa a week ago.
August has been one of the driest on record throughout the Midwest during a crucial period in soybean development. Dryness could trim supplies of U.S. soybeans, which are cheaper than oilseeds from other exporting countries.
“This dryness is taking the top end off of yields, at a time when U.S. soybeans are 80 cents cheaper at the Gulf than they are in Brazil,” said Jim Gerlach, president of A/C Trading.
The most active Chicago Board of Trade soybean contract added 16-1/2 cents to $9.15-1/4 a bushel, the highest since Jan. 22 (all figures US$).
CBOT corn rose 6-3/4 cents to end at $3.44-3/4 a bushel after reaching $3.45, the highest since July 10, while wheat added 16-3/4 cents to 5.26-1/4 a bushel.
A storm last week packed hurricane-force winds that impacted about 38 million acres of farmland across the U.S. Midwest, flattening crops and destroying grain bins. President Donald Trump approved emergency aid for Iowa, the top corn-growing state, on Monday.
Corn futures climbed as much of the U.S. Midwest attempts to assess the damage, and traders increasingly bet last week’s USDA report predicting a record large corn crop was too optimistic.
“People looked at (the numbers) and believed that the acres aren’t as big as what the government is forecasting,” said Don Roose, president of U.S. Commodities. “Over the weekend, we were supposed to get some rain, and the forecast has turned drier.”
Wheat made its biggest gain since July 15 as exporters sold 130,000 tonnes of hard red winter wheat, bound for unknown destinations, according to the Agriculture Department.
— Reporting for Reuters by Christopher Walljasper; additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore.