BLBG: Corn, Soybeans Gain for Second Day as Dry Weather Stresses Argentine Crops
Corn and soybeans advanced for a second day as dry weather stressed crops in Argentina, raising concerns the global deficit may be larger than estimated.
Argentina will continue to have a rainfall deficit in the seven days from yesterday, Telvent DTN Inc. said in a forecast. The lack of rainfall, combined with above-normal temperatures, will stress pollinating corn and developing soybeans, the forecaster said.
“The market is still processing the news of a persisting lack of rain in Argentina,” said Carsten Fritsch, an analyst at Commerzbank in Frankfurt. “No improvement of the situation is in sight either for next week.”
March-delivery corn gained 4.25 cents, or 0.7 percent, to $6.1125 a bushel at 11:03 a.m. London time on the Chicago Board of Trade. The price is up 45 percent in the past year.
The corn harvest in Argentina will decline to 20.4 million metric tons this year from 22.5 million tons, after drought hurt the crop, the Buenos Aires Cereals Exchange said Jan. 6.
“It’s a major concern,” Tetsu Emori, a commodity fund manager at Astmax Co., said by phone from Tokyo, referring to the weather in Argentina. “Production of both corn and soybeans could be cut in South America.”
The U.S. Department of Agriculture forecast last month that global demand for corn will outstrip production by 17.2 million tons this year. The forecast assumed that Argentina’s corn production will rise to 25 million tons.
The soybean harvest in Argentina, the world’s largest after the U.S. and Brazil, is forecast to drop 13 percent to about 48 million tons in the current crop year because of a lack of rainfall, Argentina’s soybean group Acsoja said yesterday.
March-delivery soybeans gained 5 cents, or 0.4 percent, to $13.855 a bushel. Wheat for March delivery gained 6.5 cents, or 0.9 percent, to $7.7375 a bushel. Milling-wheat futures for March delivery in Paris were unchanged at 254 euros ($328.85) a ton.
Rainfall forecast this week in southern Australia may lower the quality of crops still in fields of the fourth-largest wheat exporter, Australia & New Zealand Banking Group Ltd. said.
To contact the reporters on this story: Tony C. Dreibus in London at tdreibus@bloomberg.net.
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.
