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Worse weather helps corn back over $4 a bushel

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Crops recovered early weakness, helped fund buying encouraged by the prospect of even wetter conditions in the US than previously forecast, helping corn close above $4 a bushel for the first time since June.

The global forecast system, a numerical weather model run by America's National Oceanic and Atmospheric Administration, has predicted worse ran than previously thought over the next days in parts of Illinois, Iowa and Wisconsin.

Forecasts for 6-10 days and 11-15 days too are flagging wetter conditions than had been expected for big chunks of the Midwest.

"The updated forecast is supportive," Vic Lespinasse, the GrainAnalyst.com marketwatcher, said.

Which is what US crops needed when the dollar strengthened, undermining their competitiveness on export markets.

Back over $4

Soybeans, which are part-way through harvest (although they should be midway through by now) didn't quite make it back into positive territory, ending down 2.5 cents at 10.05 ½ a bushel for November delivery.

But corn, which is even further behind in harvesting, wiped out early losses to close up 4.25 cents at $4.03 ½ a bushel in Chicago - its first close over the $4 mark since June 18.

It has now gained more than one-third from its early-September low.

Wheat sweet

Wheat did even better.

Poor weather forecasts indicate some improvement to the grain's fundamentals. The winter wheat planting season is well underway, and being somewhat delayed both directly by rain and by fields remaining tied up with autumn-harvested crops.

But wheat is also, as an alternative to corn in some uses, helped by spillover support from its fellow grain.

And then there the funds – many of which are extending investments, and others swallowing hard and covering loss-making short positions.

"The funds have piled into grains and oilseeds because of firmer crude oil and stock markets – ie [in the belief that] the world economy is recovering…..possibly," UK grain merchant Gleadell said.

December wheat closed up 9.25 cents at $5.51 ¾ in Chicago.

'More consumer interest'

It ended higher in Europe too, where crops had a weaker euro and, in particular, pound to thank in part for higher closes.

Paris wheat for November settled up E1.75 at E131.5 a tonne, with London wheat for November ending £1.50 higher at £103.50 a tonne.

At Glencore UK, Hugh Schryver noted "a little more consumer interest".

He said: "There is a little bit of very short term demand emerging for the lower grade milling wheat. In the south of the country the premium has moved up to about £6 a tonne as traders cover sales."

Some concerns also remain for the health of winter wheat in Ukraine, a major competitors on export markets, despite soothing comments from Kiev-based analysts UkrAgroConsult.

A report from US officials has warned of "alarmingly unfavourable" dry conditions for some winter-sown grains, noting that subsurface moisture reserves remain "significantly below normal".

By Agrimoney.com

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