Corn futures at the Chicago Board of Trade rallied to a 3 month high on Thursday amid persistent concerns about dry weather in the eastern US Midwest crop region, traders said.
Traders said most weather forecasts indicate little relief in sight from the dry conditions, leading to the potential for harm to the US corn crop at a time when record-large corn production is needed. Soaring wheat markets also aided the advance in corn futures with US and French wheat futures surging to fresh 11-year highs.
CBOT corn closed up 3/4 to 5 cents per bushel, with July up 5 at $4.09-1/2 per bushel. New-crop December was up 2-1/2 at $4.17-1/2 per bushel. Volume was large estimated by the exchange at 322,909 futures and 68,439 options. Spreading helped boost volume numbers, traders said.
DTN Meteorlogix weather early Thursday said dry weather is expected to continue for at least another five days in the central and eastern US Midwest crop region. Meanwhile, wet weather is starting to become a concern in portions of the far western crop area, Meteorlogix said. Cropcast Agricultural Weather said the dryness in the Midwest has begun to show up on this week's drought monitor, as conditions have deteriorated in Illinois, Indiana, Ohio and Kentucky.
The next 5 days still limits any rainfall for the Midwest, leading to increasing concerns for crops there, especially corn, Cropcast said. US farmers have planted the largest land area to corn since 1944 to take advantage of the highest corn prices in a decade amid the surging demand for corn from the ethanol industry.
Export news included data from USDA's weekly export sales report early Thursday showing 586,700 tonnes (OC-NC) of US corn were sold for export last week, within the range of estimates for 400,000 to 700,000 tonnes. USDA early Thursday said exporters sold 115,000 tonnes of US corn to an unknown destination.
Overnight, trade sources in Seoul said South Korea bought 57,000 tonnes of corn from China with the purchase made last Friday. World governments are beginning to take note of the soaring price for feed grains, including corn, amid the expansion of corn's use as a fuel.
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