|17 June, 2019

Corn hits highest since 2014 on expectations of lower US output

The most-active corn contract on the Chicago Board of Trade was up 2.3% at $4.63-1/4 a bushel

Image used for illustrative purpose. Corn Growing On Farm Against Sky.

Image used for illustrative purpose. Corn Growing On Farm Against Sky.

Gettyimages

SINGAPORE - Chicago corn futures climbed more than 2% on Monday to a five-year top as more rains and flooding in parts of the U.S. Midwest are likely to curb output in the world's biggest producer of the grain.

Wheat rose to a nine-and-a-half-month peak while soybeans advanced more than 1%, gaining for a sixth consecutive session.

The most-active corn contract on the Chicago Board of Trade was up 2.3% at $4.63-1/4 a bushel, as of 0305 GMT, near the session high of $4.64 a bushel - the highest since June 2014.

"The market is finding new 'horror stories' about U.S. corn crops as it scours the U.S. Midwest for information," said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

The storms have left millions of acres unseeded in the $51 billion U.S. corn market and put crops that were planted late at a greater risk for damage from severe weather during the growing season.

Together, the problems heap more pain on a farm sector that has suffered from years of low crop prices and a U.S.-China trade war that is slowing agricultural exports.

End-users of corn, such as producers of livestock feed and ethanol, have been bidding up for old-crop supplies to prepare for tighter domestic inventories.

"The market does not believe that farmers can complete planting before the window closes. The weather will now have a material impact on supplies," said Phin Ziebell, agribusiness economist, National Australia Bank.

Wheat was up nearly 1% at $5.43-3/4 a bushel after climbing to its highest since Aug. 31 at $5.44-3/4 a bushel, and soybeans added 1.4% to $9.09-1/2 a bushel, having firmed 1% in the previous session.

Analyst said soybeans were drawing support from the wet U.S. weather. Soybeans have a later planting window, but should the rains continue, farmers may be unable to finish planting of the oilseed too.

U.S. soybean processors likely crushed fewer soybeans last month than they did in the same month a year ago, but the crush rate was still the second-largest on record for May, according to analysts polled ahead of a monthly industry report.

Large speculators raised their net long position in CBOT corn futures in the week to June 11, regulatory data released on Friday showed.

The Commodity Futures Trading Commission's weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and increased their net short position in soybeans.    

(Reporting by Naveen Thukral, additional reporting by Colin Packham in SYDNEY; Editing by Subhranshu Sahu)

© Reuters News 2019

More From Commodities