U.S. grain futures surged Tuesday as persistent rains fueled worries farmers won't plant as much corn and wheat as they had planned.
Corn soared 22 3/4 cents, or 3.3%, to a one-week high of $7.20 1/4 a bushel, while soft red winter wheat climbed 27 1/2 cents, or 3.7%, to $7.64 a bushel. July is the most actively traded contract for each market at the Chicago Board of Trade.
Forecasts for cool, wet weather increased worries about plantings after government data showed farmers are well behind schedule in sowing crops in Indiana, Ohio and North Dakota. Farmers may give up on planting this spring unless the weather clears up because late-planted crops often produce less grain.
"We're running out of time," said Bill Gentry, analyst at Risk Management Commodities, a brokerage in Indiana.
Traders are on edge about corn planting, in particular, because farmers need to harvest a big crop next fall to rebuild inventories, which are projected to reach a 15-year low this year. Concerns about tight supplies drove corn futures to record highs last month, and prices have since pulled back 8%.
The relentless rains have led analysts to downgrade their expectations for plantings, indicating the harvest will also be smaller than expected. AgResource Company, a Chicago-based consultancy, predicted corn plantings would fall nearly 2% short of the government's forecast for 92.2 million acres due to poor weather.
"The date on the calendar now makes planting delays a problem we may not overcome," said Tim Hannagan, analyst for PFG Best, a brokerage in Chicago.
As of Sunday, 63% of the nation's corn was planted, behind the five-year average of 75% for that time of year, according to federal data. In Ohio, which saw its wettest April on record, farmers had planted just 7% of the corn crop, below the average of 70% for that time of year.
Soggy conditions have prevented farmers in North Dakota from sowing corn and spring wheat, a variety used to make bread. Corn was 14% planted in the state, behind the average of 55%, and spring wheat was 15% planted, behind the average of 68%.
"North Dakota's a mess," said Jim Gerlach, president of A/C Trading, a brokerage in Indiana.
Spring wheat planting was 36% complete nationwide as of Sunday, behind the average of 76% for that time of year, according to the government. North Dakota is the country's top producer of the grain.
Planting delays are just the latest weather problem to hit wheat farmers and boost prices. Growers of winter wheat in Texas, Oklahoma and Kansas have seen their crops devastated by a severe drought.
The U.S. Department of Agriculture, in a weekly crop report, lowered its good-to-excellent rating for winter wheat one percentage point to 32%. That's down from 66% a year ago.
"The USDA's weekly crop progress reports were a continuation of the rather disconcertingly bad reports of the past several weeks," said Dennis Gartman, publisher of the Gartman Letter.
Farmers have started harvesting winter wheat in Texas and Oklahoma, confirming significant crop losses. They hope to see better results from the corn harvest in late summer and early fall.
Soybean futures felt spillover support from the gains in the grain markets. Soybeans for July delivery rose 1.1% to $13.41 a bushel.
CBOT July soyoil ended 0.2% higher at 56.04c/pound; July soymeal ends 1.4% higher at $350.40/short ton. U.S. rice futures finished higher, as grain markets extended gains on weather concerns. Rains and floods are delaying planting in the South. The USDA confirmed the disruptions, saying farmers had sown 69% of the crop as of Sunday, below the average of 83% for that time of year. CBOT July rice ended 28 1/2 cents or 2% higher at 14.39 per hundredweight.
Ethanol futures advanced as corn rallied, with the July contract rising 3 cents, or 1.2%, to 2.534 a gallon. Oat futures strengthened on concerns about cool, wet weather preventing farmers from planting in Canada and the northern U.S. Plains. July oats gained 3 1/2 cents, or 1%, to $3.48 a bushel.
--Andrew Johnson Jr. contributed to this report.