Corn extends run to 4-month top as rains threaten more planting delays
PARIS/SINGAPORE: Chicago corn extended a rally on Friday to hit a four-month high, as forecasts of heavy rain in parts of the US Midwest next week fuelled concern about worsening planting delays.
Wheat also extended gains to a six-week high, supported by the corn as well as worries that excess moisture could hamper sowing of spring wheat and the final growth stages of winter wheat.
Soybeans edged lower. Corn seeding snags have raised the prospect that farmers will shift some areas to later-planted soy, while renewed tensions in US-China trade talks have dampened hopes for a swift return to massive soybean shipments between the two countries.
The most-active corn contract on the Chicago Board of Trade was up 1.3% at $3.83-3/4 by 1128 GMT, after earlier touching its highest since Jan. 8 at $3.84.
Over the week, the contract was up 9.1%.
New-crop December corn was up 0.8% at $3.99-1/2 after earlier touching the psychological $4 level.
CBOT wheat was up 1.2% at $4.72-1/2 a bushel, close to an earlier six-week high of $4.73. The contract is up 11.2% so far this week.
Soybeans were down 0.5% at $8.36 a bushel but up 3.3% so far this week after rebounding from a 10-year low on Monday.
Showers in the week ahead are threatening to further slow corn planting in some Midwest grain belts that have endured torrential rain this spring.
The weather problems come at a time when commodity funds have built up massive net short positions in CBOT grains, leaving the markets vulnerable to bouts of short-covering.
"US corn is the big question mark right now," Sebastian Poncelet of consultancy Agritel said.
"We're getting near some major resistance levels in Chicago, with $4 for December corn a big step. With the end of the week and these resistance levels things could calm down a bit."
Trader estimates of net fund buying in corn on Thursday ranged from 24,000 to 40,000 contracts. The following table reflects the average of estimates from trade sources
Farmers had seeded 30% of the US 2019 corn crop by Sunday, the US Department of Agriculture (USDA) said on Monday, well behind a five-year average of 66%.
Investors will be watching the USDA's next crop update on Monday to see if farmers made much headway during relatively drier conditions this week.
The rain outlook next week was also creating concern about spring wheat sowing and late-growth conditions for winter wheat.
However, favourable growth conditions for wheat across Europe were tempering US worries.
Crop consultancy Strategie Grains on Thursday cut its forecast for this year's European Union wheat and barley production but said recent rain had eased dryness and left decent harvest prospects.