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Corn near 10-year high on U.S. planting delays; wheat firm

Chicago corn was largely unchanged on Wednesday and near a decade-high scaled in the previous session, as traders fretted over planting delays in the United States and a lack of supplies from war-torn Ukraine.

Soybeans and wheat inched higher.

“The estimated value of grain and oilseed market open interest closed the week at a historical high, driven by elevated prices as shortages of corn, wheat and vegetable oils appear imminent amid persistent and intensifying conflict in leading producer and exporter Ukraine,” JPMorgan analysts said in a note.

The most-active corn contract was unmoved at $7.99-3/4 a bushel, as of 0422 GMT, but not far from its highest since September 2012 reached on Tuesday.

Soybeans gained 0.2% at $16.95 a bushel and wheat rose 0.3% to $11.11-3/4 a bushel.

Chilly weather is delaying the start of U.S. corn plantings. The market is particularly sensitive to potential problems for the U.S. crop as Russia’s invasion of Ukraine has stalled Ukrainian grain exports.

U.S. corn planting was 4% complete, as of Sunday, below the five-year average of 6%, the U.S. Department of Agriculture (USDA) said in a weekly report on Monday. Analysts surveyed by Reuters were expecting 5%.

Dry weather forecast for the second half of April in Brazil’s central area, where some of the country’s largest grain producing states are located, might limit yields for the 2021/22 second corn crop, experts said.

After seeing its first crop affected by the lack of rainfall, Brazil now hopes to harvest an 88.5 million-tonne second crop, which accounts for nearly 75% of its total corn output in a given year.

For wheat, the USDA crop report also underscored drought risks to the crop that could exacerbate a shortfall in supply from Ukraine. The agency rated 30% of U.S. winter wheat in good-to-excellent condition, a 26-year low.

Gains in soybean prices were capped by an official forecast higher production in China, by far the world’s top importer of the oilseed.

China’s soybean output is set to increase by 25.8% in 2022, an agriculture ministry official said, amid major efforts to boost oilseed production.

The land planted with soybeans will expand by 16.7% this year, said Tang Ke, director general of the market department, under the Ministry of Agriculture and Rural Affairs.

Argentine ship workers will stage a 24-hour strike on Thursday to protest what they call delays by the government in awarding tenders to the sector, although the action is not expected to affect activity at key grains ports in and around Rosario.

The Maritime, Port and Naval Industry Federation (Fempinra) announced the strike on Tuesday, less than a week after protests by grains truck drivers snarled up transportation of soy and corn right in the middle of the harvest season.

Ukraine has insufficient storage capacity even for its reduced 2022 grain harvest, the United Nations’ World Food Programme said on Tuesday, with the country struggling to export existing stocks during the invasion by Russia.

Commodity funds were net sellers of CBOT corn, wheat, and soymeal futures contracts on Tuesday, and small buyers of soybean and soyoil contracts, traders said.
Source: Reuters (Reporting by Naveen Thukral; Editing by Uttaresh.V and Rashmi Aich)

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