Corn futures advanced in Chicago, curbing a weekly loss, as dry weather that’s reduced soil moisture in the Midwest is forecast to continue, threatening yields in the largest U.S. growing region.
In Iowa, the largest U.S. corn producer, topsoils rated as short to very short on moisture jumped to 44 percent in the seven days through May 20 from 9 percent a week earlier, the National Drought Mitigation Center reported yesterday. Topsoil moisture in Illinois, the second-largest grower, was 33 percent rated short.
“U.S. weather issues over the next four months will bring concerns about tight corn supply right back to the fore,” Paul Deane and Victor Thianpiriya, analysts at Australia & New Zealand Banking Group Ltd. (ANZ), wrote in a report today.
July-delivery corn gained as much as 1.9 percent to $5.895 a bushel on the Chicago Board of Trade after losing 4.1 percent yesterday. The contract traded at $5.8625 a bushel at 2:21 p.m. Paris time, trimming the weekly loss to 7.7 percent.
“Late-day weather forecasts continue to call for warm and dry weather for much of the Midwest over the three-day holiday weekend,” forecaster Telvent DTN wrote late yesterday. The U.S. observes the Memorial Day holiday on May 28.
A prolonged drought in the U.S. may cut the harvest in the world’s largest grower and exporter of the grain, leaving global supply below estimates from the U.S. Department of Agriculture and the International Grains Council.
The London-based council yesterday forecast a “huge” U.S. harvest, pushing global production to 913 million metric tons in the year through June 2013. That’s 12.7 million tons more than it predicted last month. The USDA said May 10 production around the world will rise to an all-time high of 945.78 million tons.
Wheat for July delivery traded in Chicago rose 1.9 percent to $6.755 a bushel, trimming the weekly loss to 2.8 percent. Milling wheat for November delivery traded on NYSE Liffe in Paris added 0.9 percent to 214.75 euros ($269.17) a ton.
Soybeans for July delivery added 0.2 percent to $13.7875 a bushel in Chicago, taking the weekly loss to 1.9 percent.
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