Corn Prices Advance as Rain Delays Seeding; Wheat Jumps to 2-Month High

Corn gained on speculation that wet, cold weather across the U.S. Midwest will delay planting, reducing yields. Wheat advanced to a two-month high.

About 7 percent of the corn crop was planted as of April 17, down from 16 percent a year earlier, and up from 3 percent the previous week, the U.S. Department of Agriculture said April 18. The average for the previous five years is 8 percent.

“Given more rains in the U.S. Midwest over the weekend, we may see another delay in planting of the corn crop amid forecasts for tighter global supply this year,” said Han Sung Min, a broker at Korea Exchange Bank Futures Co. in Seoul.

July-delivery corn increased 14.75 cents, or 2 percent, to $7.5925 a bushel in Chicago by 11:32 a.m. London time. The grain fell 0.7 percent last week.

While global corn production is forecast to rise 4.7 percent to 847 million metric tons, it won’t be enough to meet demand, draining stockpiles to 111 million tons, from 119 million tons in the current season, according to the International Grains Council. Demand will rise 1.3 percent to 854 million tons, it said April 20.

Cool, wet weather will delay the planting of crops this year fromNorth Dakota to Arkansas, including parts of the Ohio River Valley and Tennessee River Valley, according to forecasterPlanalytics Inc. U.S. farmers typically plant corn and spring wheat in April and May, and soybeans in May and June.

China Exports

China’s increasing demand for corn may force the nation to end exports and rely on overseas suppliers, Jay O’Neil, an adviser at the U.S. Grains Council, said today. “As we go into 2012, there’ll be no more exports from China and very possibly imports,” O’Neil said at a conference inSingapore.

China was estimated by the USDA to ship 100,000 tons in the 2010-2011 marketing year, down from 151,000 tons a year earlier. It’s estimated to increase corn imports to 1.5 million tons, from 1.296 million tons a year ago, according to the USDA.

The country’s imports may rise to 2 million tons this year, John Baize, who runs international agricultural consulting firm John C. Baize and Associates, said at the same conference.

“The last thing they want to do is become dependent on corn imports,” Baize said, referring toChina’s government. China doesn’t want “to be heavily dependent on the U.S.”

Soybean Imports

China’s soybean imports “will reach 60 million tons sometime in the not-so-distant future,” the Grains Council’s O’Neil said. China, the world’s biggest buyer, was estimated by the USDA to buy 57 million tons this year.

Soybeans for July delivery rose 2 cents, or 0.1 percent, to $13.9175 a bushel. The oilseed gained 3.5 percent last week.

July-delivery wheat advanced 20.25 cents, or 2.4 percent, to $8.55 a bushel, and earlier today climbed to $8.57, the highest since Feb. 22.

(Source: http://www.bloomberg.com/news/2011-04-25/corn-prices-advance-as-rain-delays-seeding-wheat-jumps-to-2-month-high.html)