June 7 (Bloomberg) -- Wheat may gain as almost half of the U.S. winter crop remained in poor condition, while rains in France, Germany and the U.K., the European Union’s largest shippers, may already be too late to reverse crop damage.
The July-delivery contract rose as much as 0.4 percent to $7.47 a bushel on the Chicago Board of Trade before trading little changed at $7.4375 at 3:03 p.m. Singapore time.
About 44 percent of the U.S. winter-wheat crop was rated poor to very poor as of June 5, unchanged from a week earlier, and up from 9 percent a year ago, the U.S. Department of Agriculture said yesterday. The winter crops probably were irreparably harmed by the driest weather in 50 years in France, the hottest spring in 352 years in England and dry weather in central Germany, Telvent DTN Inc. said yesterday.
“The recent weather has been far from ideal with drought in Europe, drought in the U.S. Great Plains and floods in the northern U.S. wheat-belt hurting yield prospects,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia said in a report today. “Current wheat prices suggest existing production forecasts are overstated and will be revised lower in the coming months.”
Much of France and western Germany has received up to 1.5 inches (3.8 centimeters) of rain in the past two days and the area may have more storms over the next two weeks, said Allen Motew, a meteorologist with QT Weather in Chicago. France, the world’s largest exporter after the U.S. last year, had its driest March-to-May period in half a century, forecaster France Meteo said. The country begins its harvest in July.
The weather has been so dry in France that livestock producers are having trouble finding enough grain to feed their animals as plants wither, Bruno Lemaire, the country’s agriculture minister, said at a meeting in Washington on June 3.
About 79 percent of the U.S. spring wheat was planted as of June 5, compared with 97 percent for the same period last year, and the past five-year average of 98 percent, the USDA said yesterday. Planting has been delayed as excessive rainfall in the northern plains made fields too muddy for farm machinery.
Corn for July delivery advanced 0.2 percent to $7.3375 a bushel on the Chicago Board of Trade. Soybeans for delivery in the same month gained 0.5 percent to $13.90 per bushel.
Warmer, drier weather in most of the U.S. last week allowed farmers to accelerate delayed corn and soybean planting and gave a boost to crops stunted by cold, wet conditions earlier in May, the government said.
About 94 percent of the corn crop was planted as of June 5, up from 86 percent a week earlier and 99 percent a year earlier, the USDA said yesterday in a report. The prior five-year average was 98 percent. An estimated 68 percent of the soybean crop was sown, up from 51 percent a week earlier and 82 for the previous five years, on average.
“Recently improved planting weather in the U.S.” helped push corn prices lower, Commonwealth Bank’s Mathews said.
--With assistance from Whitney McFerron and Jeff Wilson in Chicago. Editors: Jarrett Banks, Thomas Kutty Abraham
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