Corn Advances as Wet Weather May Delay Planting of U.S. Crop

Corn rose, closing at the highest price in almost three weeks, on speculation that wet weather will delay planting in the southern U.S., increasing the risk of lower yields.

The National Weather Service’s midday forecast called for above-normal rainfall from southern Nebraska to Georgia for four days starting April 18. That may slow planting, which should be completed by the end of the month to avoid damage from summer heat. Prices earlier fell as much as 0.9 percent on forecasts for warm, dry Midwest weather for the next week, which should abet a quick start to seeding.

“Corn rallied after the midday forecasts said it would be too wet to plant corn” in some areas, said Joe Victor, the director of marketing for Allendale Inc., a farm adviser and broker based in McHenry, Illinois. “The wetter forecast encouraged traders to cover short positions.”

Corn futures for July delivery rose 3.75 cents, or 1 percent, to $3.6325 a bushel on the Chicago Board of Trade, the highest closing price for a most-active contract since March 24. The commodity has fallen 12 percent this year, partly on expanding crop forecasts for Brazil and Argentina, the biggest exporters after the U.S.

Prices also rose as farmers slowed sales for immediate delivery to focus on planting corn, said Greg Grow, the director of agribusiness for Archer Financial Services in Chicago.
Planting Progress

About 3 percent of the corn crop was planted as of April 11, compared with 2 percent a year earlier, the U.S. Department of Agriculture said yesterday. The average at the same point of the season for the previous five years is 4 percent.

Planting was under way in Illinois, Indiana, Iowa, and Minnesota, four of the five-largest corn-producing states, with progress slightly ahead of normal in Iowa and Minnesota, the USDA said. In Illinois, the pace was 3 percentage points behind the five-year average.

“Farmers are busy planting corn and not selling corn,” Grow said. “There is no incentive to sell corn until after farmers finish planting, or the market rallies.”

Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, government figures show.

Jeff Wilson
Source: Bloomberg