May 16, 2011

CBOT corn rises as rains prompt US farmers to scrap seeding

CBOT corn rebounded on Friday (May 13) on speculation that wet weather in the US Midwest will cause farmers to abandon plans to seed the grain, while wheat and soy also rose.

About 40% of US corn was seeded as of May 8, down from 80% at the same time a year earlier and a five-year average of 59%, USDA data showed. About three million acres in Louisiana will be under water because of Mississippi River floods, Governor Bobby Jindal said on May 11. Corn is up 84% in the past year.

"If we don't get the corn planted, the majority of that is going to go into soy," William Adams, a fund manager at Resilience AG in Zurich, said. "It looks like we're going to lose a lot more acres of corn."

Corn futures for July-delivery gained 6.5 cents, or 1%, to US$6.87 a bushel by on the CBOT. The price is little changed this week after tumbling by the limit of 30 cents on May 11 on a US report saying that inventories will be bigger than analyst forecasts.

US export sales of corn jumped 61% from a week earlier and soy shipments almost tripled in the week ended May 5, government data showed. US farm exports climbed to an all-time high of US$75 billion during the first half of the 2011 fiscal year, the USDA said on May 11.