(BusinessWeek) – Soybeans jumped the most in a week in Chicago amid concern a lack of rain in parts of the U.S. Midwest will hurt yields. Corn and wheat also rose.
The area of the Corn Belt with below-normal rainfall has expanded to cover 70 percent of the region, with more dry days ahead this week, QT Weather said in a report yesterday. Dry and warm conditions continue in the U.S. Midwest, particularly Iowa, western Illinois and Missouri, adding stress for filling soybeans, DTN said Aug. 30.
“Market news is dominated by weather conditions in the Corn Belt, with a continuation of the water deficit, especially damaging for soybean crops in the critical stage of pod formation,” Paris-based farm adviser Agritel wrote.
Soybeans for delivery in November surged as much as 3.4 percent to $14.0425 a bushel on the Chicago Board of Trade, the biggest gain since Aug. 26, and were at $14.025 at 5:05 a.m. The oilseed rose 13 percent last month, the most since July 2012, on concern crops delayed by wet weather earlier this year will be damaged by dryness or an early frost. U.S. markets were closed yesterday for the Labor Day holiday.
A gauge of Chinese manufacturing rose to its highest level in 16 months in August as new orders jumped, adding to evidence that the economy of the world’s largest soybean importer is strengthening, according to a government report over the weekend. In the U.S., the Institute for Supply Management may say factory output expanded a third month after gauges from the U.K. to Spain showed European manufacturing is recovering.
“Global economic data are providing a solid fundamental backdrop for commodities,” Luke Mathews, a Sydney-based commodity strategist at Commonwealth Bank of Australia, said by phone today.
Corn Gains
Corn for delivery in December advanced 1.6 percent to $4.895 a bushel, while wheat for delivery the same month added 0.7 percent to $6.585 a bushel in Chicago. Milling wheat for November delivery traded on NYSE Liffe in Paris advanced 0.4 percent to 190.75 euros ($251.52) a metric ton.
“For wheat the market is a bit more calm, the drought in the U.S. doesn’t affect this crop, which is already harvested,” Agritel wrote. “Only corn is also supported by the risk of potential yield loss.’
