HAMBURG: Chicago corn futures climbed more than 2pc to a five-year high on Monday as more rain and flooding in parts of the US Midwest raise concerns about damage to the corn crop.
Wheat reached a 9-1/2 month high and soybeans also rose.
"Corn prices are finding support today from persistent rainfall in the US Midwest that has prevented some corn sowings and is hindering crop development," said Michael Magdovitz, senior agriculture commodities analyst at Rabobank.
"Wheat and soybeans are largely receiving support from corn's rising weather premium."
Chicago Board of Trade most active corn was up 1.9pc at $4.62 a bushel at 1114 GMT, near the session peak of $4.64-1/4 a bushel - the highest since June 2014.
Wheat rose 1.8pc to $5.48-1/4 a bushel, around its highest since August 2018. Soybeans rose 1.8pc to $9.13 a bushel, having risen about 1pc on Friday.
Repeated rain in US grain belts has left millions of acres of corn unseeded, putting crops which were planted late at a greater risk of damage from severe weather during the growing season.
"The area of corn US farmers were preventing from planting due to rainfall will be a matter of debate for the coming months," Magdovitz said.
"Still, a majority of corn acreage was planted relatively late in the season, shortening the degree day exposure which is critical for yield. Corn could face further serious yield threats from heavy rain in June, heat in August and frost in October."
"Given the late and prevent plantings, US corn acreage and stocks are expected to decline year-on-year and the margin (of supply cover) for further production issues is not high."
End-users of corn, such as producers of livestock feed and ethanol, have been buying up US old-crop supplies to prepare for tighter domestic inventories.
Analyst said soybeans were also drawing support from the wet US weather.
Continuing rain is also increasing the risk for soybeans, where the US Department of Agriculture (USDA) has so far opted not to lower its crop expectation as it has done with corn, Commerzbank said.
"Now a loss in acreage of 2.2 million acres (890,000 hectares) is likewise envisaged here," Commerzbank said. "In its next crop estimates in July, the USDA is also likely to revise its soybean figures downwards."
Rabobank's Magdovitz added: "Wheat is also seeing support from higher corn. Farmers are likely to use more wheat instead of corn as animal feed in some regions especially Europe."
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