US grain prices rise on concern of wet spring

Grain prices rose Wednesday (Mar 17) amid speculation that wet, cooler weather could slow spring planting across much of the country.

Other factors that benefited commodities across the board included a weaker dollar and the rising stock market.

It was a wetter-than-normal winter for much of the Midwest, and cooler weather already has hampered planting in some states, such as Texas, said Mark Schultz, chief analyst at Northstar Commodity in Minneapolis.

In addition, a government report has forecast major spring flooding from North Dakota and Minnesota to Iowa.

Grain prices typically rally this time of year ahead of a government report at the month's end that will forecast how many acres farmers intend to plant in specific crops, said Jack Scoville, vice president of Price Futures Group.

"These markets have seen a lot of selling over the last week or two, most of them anyway and probably need a little bit of a rally," he said.

In contracts for May delivery, wheat gained 9 cents to close at US$4.96 a bushel and soy rose 14 cents to close at US$9.59 a bushel.

May corn rose 7.25 cents to US$3.74 a bushel. Schultz said the increase can be traced in part to rising gasoline prices, which eventually could benefit ethanol producers. "The higher the gas goes, probably the greater the odds are that you may see a greater blend in ethanol eventually to gasoline," he said.

Commodities and the dollar often trade opposite of each other because a weaker dollar can make commodities, which are priced in dollars, more attractive for overseas buyers.