Corn jumped the most in 10 months, gaining the maximum allowed by the Chicago Board of Trade, as rain and frigid weather slowed the pace of planting in the U.S., the world’s top exporter. Kansas City wheat futures surged the most since November, and soybeans rose.
Farmers sowed 4% of corn crops as of April 21, trailing the five-year average pace of 16%, the U.S. Department of Agriculture said April 22. The agency will update its weekly crop progress today. Much of the Midwest from Missouri to Michigan had double the normal rainfall in the past two weeks, and the region will remain wet and cool through May 7, T-Storm Weather LLC in Chicago said in a report.
“The weather is wetter, and little planting is likely to occur with most farmers still working to apply fertilizer and prepare fields for seeds,” Jim Gerlach, the president of A/C Trading Inc. in Fowler, Indiana, said in a telephone interview. “The risk is that this weather doesn’t break and planting delays become more severe in May,” increasing the risk of crop damage during summer heat, Gerlach said.
Corn futures for July delivery surged by the exchange limit of 40 cents, or 6.5%, to close at $6.5975 a bushel at 1:15 p.m., the biggest gain since June 25. Trading limits will expand to 60 cents tomorrow, Chris Grams, a spokesman for the exchange owner CME Group Inc., said in a telephone interview.
Corn futures for December delivery, after the harvest, jumped 6.8% to $5.595.
Iowa, Illinois and Indiana probably will have the wettest April ever, T-Storm Weather said. Fields from northern Louisiana to Michigan may get as much as 2 inches (5.1 centimeters) of rain in the next six days, increasing planting delays for most of the central U.S., the forecaster said.
Corn also rose as some traders unwound bets on a price slump, Gerlach said. In the week ended April 23, hedge funds increased net-short positions by 14% to 197,224 futures and option contracts, the most since the Commodity Futures Trading Commission started reporting the data in June 2006.
On the Kansas City Board of Trade, wheat futures for July delivery advanced 3.4% to close at $7.7575 a bushel, the biggest increase since Nov. 27. Earlier, the grain reached $7.79, the highest since Feb. 21.
Growers, grain traders and industry analysts are touring fields this week in Kansas, the biggest U.S. producer of the winter variety. Drought conditions and freezing temperatures three times this month across most of the central and southern Great Plains will cut U.S. yields to 43 bushels an acre from 47.2 a year earlier, Berwyn, Pennsylvania-based Planalytics Inc. said today in a report.
“Very poor winter wheat-condition ratings and a late emergence from dormancy have seen many make substantial cuts” to estimates, Chris Gadd, an analyst at Macquarie Group Ltd. in London, said in a report.
In Chicago, wheat futures for July delivery rose 3.5% to $7.165, the biggest gain since April 3. Earlier, the price reached $7.1975, the highest since April 15.
Soybean futures for July delivery advanced 2% to $14.0875 a bushel, after reaching $14.11, the highest since March 28.
Corn is the biggest U.S. crop, followed by soybeans, hay and wheat, USDA data show.