September 8, 2011


CBOT corn, soy, wheat advance on weather concerns



CBOT corn, soy and wheat rose on September 7 amid speculation that dry weather in the US may affect crops, according to a Bloomberg report.


Conditions worsened last week for US corn and soy, said the USDA. Dry, cool weather across the Midwest increased plant stress and hastened crop maturity. Dryness this week in the central and southern Plains winter-wheat area will maintain the drought pattern, Telvent DTN Inc. said in a bulletin.


"Uncertainty about US corn production continues to feed the markets," Paris-based farm adviser Agritel said in a daily note. "The crop rating declined again for corn."


December delivery corn advanced 1% to US$7.63 a bushel on the CBOT Trade by 12:37 pm Paris time. The grain climbed 64% in the past year, helped by adverse weather in July and August that hurt crops.


About 52% of the corn crop in the top 18 producing states was in good or excellent condition as of September 4, down from 54% a week earlier and 69% a year earlier, USDA said. An estimated 56% of soy got the top rating, against 57% a week earlier and 64% a year earlier, it said.


"The market will have been expecting this drop in condition, but it will reinforce the issue that this year's corn crop is going to fall short of demand and that prices will remain supported as a result," Profarmer, a unit of NZX Ltd., said in a report.


Soy for November delivery gained 0.7% to US$14.32 a bushel. The oilseed advanced 36% in the past year.


The US corn harvest may be less than the USDA's August forecast, said agricultural researcher Informa Economics Inc. sa. Output may total 12.71 billion bushels this year, compared with the government's estimate of 12.91 billion, it said. Informa also cut its soy forecast 2.5% from last month to 3.06 billion bushels, still more than the USDA estimate of 3.06 billion.


Agricultural researcher and broker Allendale Inc. said that production of the crops will fall below government forecasts. The USDA is scheduled to update its estimates on September 12.


Demand for US soy may intensify if the harvest comes in below estimates, potentially driving prices higher should South American countries miss out on the rain they need to fill the gap, researcher Oil World said in a report.


"Given the growing likelihood that the US soy crop turns out even below the USDA estimate of August 11 of 83.2 million tonnes (down 7.4 million tonnes from a year ago), demand for US soy must indeed be rationed and most of this will probably be done in exports," Oil World said.


Wheat for December delivery gained 0.9% to US$7.67 a bushel. The grain advanced 4.3% in the past year. Milling wheat for November delivery traded on NYSE Liffe in Paris advanced 0.7% to EUR 207.25 (US$291.06) a tonne.

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