Corn climbs to near 2-year high on U.S. planting delays

Chicago corn futures rose more than 2% on Tuesday, climbing to a near 2-year high as forecasts for heavy rains across key U.S. growing areas threatened to further delay planting.

Wheat rose to its highest since February, driven up by short-covering while soybeans gained for a second session. The most-active corn contract on the Chicago Board of Trade was up 2.4% at $4.13-3/4 a bushel by 0317 GMT, near the session high of $4.14-3/4 a bushel – its highest since July 11, 2017. Wheat rose 2.4% to $5.01-1/4 a bushel, after climbing to its highest since Feb. 19 at $5.03-1/4 a bushel and soybeans were up 1.8% at $8.44-1/2 a bushel.

Above-normal rainfall is expected across most of the Midwest and Plains farm belt over the next 15 days, further delaying planting of corn and soybeans and potentially damaging the quality of the developing winter wheat crop, forecasters said.

“We are seeing pretty strong gains in corn and beans as planting delays are getting serious,” said Phin Ziebell, an agribusiness economist at National Australia Bank. “The market is getting worried about planting delays and rain for sure.” The most active contract is expected to surge 7% to $4.40-3/4 over the next one or two weeks, as it is riding on a fierce wave C, according to Wang Tao, a Reuters market analyst for commodities technicals.

Once corn stands firm above $4.40-3/4, a 23.6% retracement, a more bullish target at $5.82 will be established, as indicated by a double-bottom. U.S. grains markets were closed on Monday for the Memorial Day holiday. In Asia, the grain markets are getting concerned about spreading armyworm in top consumer China. China has found destructive armyworm in corn crops in the eastern province of Jiangsu, state media reported late Monday.

The destructive pest has now spread to 15 provinces and regions since it was first detected in the southwestern province of Yunnan in early January. Large speculators sharply reduced their net long position in CBOT corn futures in the week to May 21, the U.S. Commodity Futures Trading Commission said on Friday. The speculators also cut their net short positions in CBOT soybean and wheat futures, the data showed.

Grains prices at 0626 GMT

 Contract    Last    Change   Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  501.25  11.75    +2.40%   +6.59%       451.27  81
 CBOT corn   413.75  9.50     +2.35%   +6.16%       371.65  84
 CBOT soy    844.50  14.75    +1.78%   +2.80%       848.13  61
 CBOT rice   11.61   $0.05    +0.48%   +0.52%       $10.89  93
 WTI crude   59.28   $0.65    +1.11%   +2.37%       $62.64  
 Currencies                                                 
 Euro/dlr    $1.118  -$0.001  -0.13%   -0.18%               
 USD/AUD     0.6924  0.001    +0.10%   +0.01%

Source:  Reuters (Reporting by Naveen Thukral; Editing by Rashmi Aich)