Soybeans and corn rose to the highest levels in more than a month as downpours in the US raised potential for crop damage for the world’s biggest producer.
Parts of the Midwest received more than six times the normal rainfall in the week through Monday, the National Weather Service said.
Farmers are planting soybeans at the slowest pace for this time of year since 1996 and the wheat harvest is making the least progress in almost two decades.
Corn and soybean prices have fallen over the past year as global output headed for a record. Soybeans, used for cooking oil and livestock feed, lost 22 per cent, while corn dropped 17 per cent. Australian and US forecasters say an El Nino weather pattern is strengthening, which may bring wetter summers to North America. Citigroup Inc. says returns from grains could increase by as much as 25 per cent.
“US farmers are somewhat late planting soybeans this year, which is prompting concerns that their yields will be below normal,” Tobin Gorey, an analyst at Commonwealth Bank of Australia, wrote in a note.
Soybean futures in Chicago added as much as 0.9 percent to $9.68 a bushel, the highest level for a most-active contract since May 12, and traded at $9.6625 by 3p.m. in Singapore. Corn increased 1.6 per cent to $3.70 a bushel, the most expensive since 18 May. Wheat rose as much as 1.6 per cent to $5.14 a bushel, the highest since June 12.
Grain returns rise by as much as 10 per cent to 25 per cent during El Nino cycles because of damage to staple food crops, Citigroup analysts including Aakash Doshi and Ed Morse wrote in a report dated 16 June.
News by Bloomberg, edited by ESM
