U.S. grains: USDA data ignite biggest daily rallies in five years

Chicago | Reuters –– U.S. grain and soybean futures on Tuesday climbed to their highest prices since December after the U.S. Agriculture Department said crop stockpiles and spring plantings were smaller than analysts expected.

Traders are keeping a close eye on supply data amid uncertainty about how big the autumn corn and soybean harvests will be, following weeks of heavy rains in the Midwest. The storms have prevented farmers from finishing planting soybeans and raised concerns about yield losses.

U.S. corn and soybean stocks as of June 1 were up from a year ago, after record-large harvests last year, but below market forecasts due to heavy demand for both commodities, according to the USDA.

The strong usage combined with concerns about poor weather to fuel fears about tightening supplies and push up prices, traders said.

USDA said it would resurvey farmers in several states about plantings of soybeans and other crops due to the wet weather. The process will prolong uncertainty about acreage until release of the new data in August.

Chicago Board of Trade (CBOT) July corn closed up 30-3/4 cents at $4.14 a bushel after trading as high as $4.15 (all figures US$). July soybeans jumped 53-3/4 cents to $10.56-1/4 after reaching $10.59-1/4.

The gains represented the biggest one-day rallies in the spot corn and soy markets since 2010 and were the highest prices for the nearby contracts in both markets since Dec. 29.

July wheat surged 34-1/4 cents to $6.14-3/4 a bushel after reaching $6.13-1/2, the highest price for a nearby contract since Dec. 30.

Commodity funds were active, buying an estimated 40,000 soybean contracts, 25,000 corn contracts and 17,000 wheat contracts, traders said.

After the close of trading, CME Group, which owns the CBOT, raised the initial margins for speculators in corn, soy and wheat, effective at the close of business on Wednesday.

— Tom Polansek reports on agriculture and ag markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.