Corn, Wheat Advance as Freezing Weather Threaten U.S. Crops

By Luzi Ann Javier - Apr 12, 2012
Bloomberg
Corn and wheat climbed as freezing weather threatened crops in the U.S., the world’s largest shipper of both grains. Soybeans also rose.

July-delivery corn rose as much as 0.5 percent to $6.30 a bushel on the Chicago Board of Trade, before trading at $6.2975 at 2:26 p.m. Singapore time. Wheat gained 0.6 percent to $6.37.

A freeze warning was issued for the U.S. Midwest, with temperatures seen falling to 32 degrees Fahrenheit or colder, and in the southeast of the country, colder weather may lead to frost today and tomorrow morning, threatening corn and wheat in some areas, Telvent DTN Inc. said in a report yesterday.

“Supporting values were concerns that cold temperatures may have damaged U.S. wheat crops,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia (CBA), said in a report e-mailed today. “Freezing temperatures across the U.S. Midwest may have damaged emerging corn crops, according to U.S. weather forecasters.”

Corn futures may reach $6.12 in the fourth quarter on higher purchases by China, increased demand from ethanol producers, and concerns about the next U.S. harvest, UBS AG analysts led by Peter Hickson wrote in a report. That’s higher than the December-delivery contract, which traded at $5.465.

“We think new crop values assume too little weather risk,” UBS said, referring to the December contract. “We view the initial USDA corn yield as too optimistic.”

Crop Yields

The corn crop in the U.S., the largest grower, that will be harvested in the year beginning Sept. 1 will probably yield an average 164 bushels an acre, the USDA predicted on Feb. 24. That’s higher than an estimated yield of 147.2 bushels from the last harvest.

In the import market, Nonghyup Feed Inc., South Korea’s biggest buyer of feed grains, purchased 55,000 metric tons of corn for arrival by Oct. 5 in an April 10 tender, according to Lee Tae Woong, a deputy general manager at the company’s foreign trade department. The feedmaker also bought 55,000 tons of wheat for delivery by Aug. 30 in the same bidding.

Soybeans for delivery in November gained 0.6 percent to $13.67 a bushel in Chicago.