Grain futures advance, corn touches fresh six-month high as US shipments accelerate

Grain futures advanced on Friday, corn surged to the strongest level in more than six months as demand for exports from the US, the biggest shipper, increased amid the crisis in Ukraine.

On the Chicago Board of Trade, corn futures for May delivery surged by 1.68% to trade at $4.9988 a bushel by 12:48 GMT. Futures hit a session high at $5.0238 per bushel, the strongest since August 27, while day’s low was touched at $4.8975 per bushel. Corn has advanced 14% this year after it lost nearly 40% in 2013, the steepest annual drop on record and the worst annual performance since at least 1959.

The US Department of Agriculture reported yesterday that US shipments of corn for delivery by August 31st jumped 81% in the week ended February 27th. In the past four weeks, on average, the number of deals for corn was five times higher than a year ago.

“It was a very good sales number,” Michael Pitts, a commodity sales director at National Australia Bank Ltd. in Sydney, said in a Bloomberg interview today, referring to US corn export data. “Ukraine is providing a little bit of uncertainty and an uplift for commodity prices generally.”

According to data by the International Grains Council (IGC), Ukraine will be the third-largest global corn exporter after Brazil and the US, as it is forecast to ship 18.3 million metric tons of the grain in the 2013-14 season through June, up from 13.6 million tons a year ago.

The US and the European Union warned Russian President Vladimir Putin that they will both impose sanctions if he doesnt put an end to Ukraines crisis bu pursuing a negotiated solution. On March 3rd, pro-Russian forces seized control of the southern Ukraines Crimea region in what turns out to be the worst conflict between the West and Russia since the Cold War era.

Soybeans touch 7-month high

Elsewhere on the grains market, soybeans futures for settlement in May, rose 1.33% to trade at $14.5738 per bushel by 12:49 GMT. Futures touched a session high at $14.5962 per bushel, the strongest since July 24th, while day’s low was hit at $14.3575 per bushel. The grain settled last week 2.5% higher, after adding 0.5% in the previous 5-day period. However, the oilseed has lost 8.5% in 2013.

DTN.com reported on March 6th that soil moisture for second crop and late-filling early crops in central Brazil is adequate to surplus at the moment. A drier trend is possible for the next five dasys or so, before potentially heavy rain develops over the Mato Grosso producing region. Area which will experience less rain should see improved conditions for harvest, while areas with heavier rainfall may lose additional soybeans crop, because of wet conditions.

Meanwhile, the website reported that conditions in central Argentina will continue to be mostly favorable for filling and maturing corn and soybeans at this time. Thunderstorms are expected to return over the region during the next week. Rainfall would be favorable for filling crops, but will be neutral at best for maturing crops.

Wheat trades at a 3-month high

On the Chicago Board of Trade, wheat futures for settlement in May soared by 2.35% to trade at $6.6138 per bushel by 12:49 GMT. Prices touched a session high of $6.6288 per bushel, the highest since December 3rd, while day’s bottom was touched at $6.4438 a bushel.

Wheat settled 8.2% up in February, after plunging 8.3% in January and 9.5% in December, on expectations for a record global output of 712.7 million tons.

According to data by the International Grains Council (IGC), Ukraine will be the sixth-largest global wheat exporter, as it is forecast to ship 9.5 million metric tons of the grain in the 2013-14 season through June, up from 7.1 million tons a year ago.

DTN’s March 6th forecast called for cold weather over the Midwest to continue for several more days, before temperatures moderate somewhat early next week, after which they will turn lower later next week. However, temperatures are not seen cold enough to harm the dormant winter wheat in the region, but soil warming will be slow for spring row-crop fieldwork.

Meanwhile, chances for precipitation over the Southern Plains seem to be limited in the next ten days. Any moisture received won’t be enough to recharge soil moisture, as spring is coming. The website also reported that no significant cold temperatures are expected over the year in the next seven-to-ten days.