Corn, Soybeans Rise as Dry Weather Threatens South America Crops

Dec 19, 2013 3:45 pm ET

Dec. 19 (Bloomberg) -- Corn rose the most in two weeks and soybeans gained on speculation that hot, dry weather in Argentina, Paraguay and southern Brazil will reduce soil- moisture reserves, increasing risks for yield loss in January.

A ridge of high pressure will keep fields dry from the Buenos Aires province in Argentina to Mato Grosso do Sul in Brazil in the next 10 days, increasing moisture deficits in areas that have received little rain during the past two weeks, T-Storm Weather LLC said in a report. Temperatures in Argentina may rise above 100 degrees Fahrenheit (38 Celsius) through Christmas on Dec. 25, boosting stress on developing crops, the company said.

“The forecast is a little drier and hotter, and that helped to put a bid in the market,” Joe Vaclavik, the president of Standard Grain LLC in Chicago, said in a telephone interview. “No one wants to sell with a hot, dry forecast into next week’s holiday.”

Corn futures for March delivery jumped 1.3 percent to close at $4.305 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest gain since Dec. 3. The grain fell 38 percent this year as the U.S. Department of Agriculture forecasts domestic output to jump 30 percent to a record.

Soybean futures for delivery in March advanced 0.4 percent to $13.19 a bushel, the fourth gain in five sessions. The oilseed, used to make animal feed and cooking oil, fell 6.4 percent this year as production in Brazil, Argentina, Paraguay and Uruguay is forecast to rise to a record, USDA data show.

Wheat fell for a sixth consecutive session, touching an 19- month low on rising global supplies, Vaclavik said.

On the CBOT, wheat futures for March delivery slipped 0.3 percent to $6.1075 a bushel after the most-active contract touched $6.10, the lowest since May 16, 2012.

--Editors: Thomas Galatola, Patrick McKiernan