Grains, Soybeans Rise as Hot Weather Nears

July 19th, 2016

By:

Category: Grains, Oilseeds

CornSoybeanWheat450x299(NASDAQ) – Grain and soybean prices recovered Monday as forecasts for a Midwest heat wave revived concerns that adverse weather could dent crop yields this summer.

Corn and soybean prices rose for the first in three sessions as weather forecasts called for extreme heat to hit parts of the Farm Belt this week, which could pressure what are expected to be bumper harvests. Temperatures could reach triple digits by the end of the week, putting pressure on the U.S. corn crop, which is in its key pollination phase, and will soon start filling kernels. While crop conditions have been strong so far this year and good rains have provided beneficial moisture for soils, hot temperatures still have the potential to harm crop yields, reducing the total size of the crop come autumn.
Mr. Koester said weather forecasts for parts of Iowa predicting over 100-degree heat and only scattered showers until August had brought some traders to the “realization that this really is not the weather you want for the kernel-fill stage.”

Corn futures for delivery in September rose 4 3/4 cents, or 1.4%, to $3.57 a bushel at the Chicago Board of Trade.

Data from the U.S. Commodity Futures Trading Commission last week also helped boost corn prices, analysts said, showing fund managers recently have closed out of bullish bets on corn, which prompted light short-covering by investors Monday.

Meanwhile, soybean prices rebounded as forecasts for hot weather also spurred worry over conditions for that crop. While August is the most important month for determining soybean yields, and soybeans typically tolerate heat better than corn, a spate of warm weather could interfere with blooming plants, analysts said.

“Soybeans trying to bloom will just burn” if temperatures climb too high, said Mr. Koester.

Prices for the oilseeds have been especially sensitive to daily fluctuations in weather forecasts, since domestic soybean stockpiles are tighter than corn or wheat, magnifying the impact of potential crop problems this year.

CBOT August soybeans gained 5 3/4 cents, or 0.5%, to $10.78 1/4 a bushel.

Wheat prices rose, bolstered in part by strength in the corn market. Huge U.S. and world grain inventories and a bumper winter wheat crop coming in from fields in the U.S. southern Plains limited gains in the market, however.

CBOT July wheat added 4 3/4 cents, or 1.1%, to $4.29 1/2 a bushel.

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