The following article is from the Wall Street Journal:
By TOM POLANSEK
Grain futures climbed as too much rain in some regions, and not enough in others, posed an early threat to the U.S. wheat and corn crops.
Forecasts for dry weather fueled wheat prices. Meteorologists cut rainfall projections in the Plains region, a key growing area already struggling with dryness, pushing wheat futures 3.5{b5a992b8e63762954627fabd02ae0ce4cbdce5a7319b086354586c608f95fa42} higher to $7.395 a bushel.
The corn crop faces the opposite problem. Wet conditions are delaying early plantings in the Midwest, where corn is the dominant crop. Corn futures jumped 21.5 cents, or 3.2{b5a992b8e63762954627fabd02ae0ce4cbdce5a7319b086354586c608f95fa42}, to $7.025 a bushel on the Chicago Board of Trade, the highest close since March 7.
Traders are trying to assess the prospects for upcoming U.S. crops. Poor weather curtailed global wheat output last year and strong demand drained corn supplies. Futures are trading near multiyear highs on concerns grain supplies will not keep pace with world demand.
Wheat futures fell earlier in the week on expectations that rain and snow would ease dryness in Kansas, the country’s top wheat-producing state. Yet forecasters’ outlooks have changed. Telvent DTN, a private weather firm, warned there is little chance in the next six days for significant moisture to improve growing conditions for hard, red winter wheat in the western Plains. The crop, used to make bread, was sown last fall and will be harvested this spring and summer.
“There are very legitimate concerns about the wheat,” said Alan Brugler, president of Brugler Marketing & Management, a brokerage in Nebraska.
As for corn, Telvent DTN said recent rain and snow in northern and eastern sections of the Midwest will continue to delay early spring field work. Cool temperatures and increasing chances for precipitation will hold back farmers in southern areas during the next five to seven days. Delays in sowing corn can curb yields and prompt farmers to switch to other crops.
Corn futures also continued to benefit from speculation that the U.S. sold corn to China last week.
The U.S. Department of Agriculture didn’t report any sales to China in weekly export data released Thursday, yet the lack of confirmation didn’t curb talk in the market, with traders and analysts saying details of the transaction were likely delaying its disclosure.
Since buying heavily last summer, China has been out of the corn market. Yet, the nation may no longer be able to put off its need for the grain, which it uses mainly for livestock feed and fuel production, analysts have said.
Source: Wall Street Journal
Posted by Haylie Shipp
