By Jeff Wilson
Oct. 23 (Bloomberg) -- Corn and soybeans rose for the first time in three days as rain, snow and strong winds threaten crops in the U.S. Midwest, where supplies are already limited because farmers withheld sales because of low prices.
As much as 3.5 inches of rain fell in parts of the Midwest, and winds as high as 65 miles (105 kilometers) an hour hit crops, said Drew Lerner, the president of World Weather Inc. in Overland Park, Kansas. Snow is falling from Colorado to Nebraska. Some farmers halted sales after prices plunged from records this year, said Don Roose, the president of U.S. Commodities Inc.
``The winter mix of weather has raised concern that crops are getting smaller,'' Roose said. ``Farmers have dug in and will not sell, which is now boosting cash bids'' from livestock producers and processors, Roose said from West Des Moines, Iowa.
Corn futures for December delivery rose 5.25 cents, or 1.4 percent, to $3.9025 a bushel on the Chicago Board of Trade. The most-active contract has fallen 51 percent from a record $7.9925 in late June, touching an 11-month low of $3.71 on Oct. 16.
Soybean futures for January delivery gained 23.75 cents, or 2.7 percent, to $8.885 a bushel. The price fell to $8.38 on Oct. 16, the lowest since August 2007. The commodity has dropped 46 percent since setting a record $16.3675 in July.
Slow Harvests
The harvests are behind last year's pace after wet weather during planting forced growers to seed crops later than normal, a government report showed this week.
About 29 percent of the corn crop was collected as of Oct. 19, compared with 58 percent a year earlier, the Department of Agriculture said. Sixty-seven percent of the soybean crop was harvested, down from 72 percent.
The government probably overstated the size of this year's soybean crop because late plantings and cool temperatures in August hurt yields, said Greg Wagner, a senior analyst for AgResource Co. in Chicago. Yields may approach 38 bushels an acre, compared with 39.5 bushels forecast by the USDA this month, Wagner said.
Corn and soybeans also rose after crude oil rebounded from a 16-month low. A rally in fuel prices may boost demand for ethanol and biodiesel made from crops, Wagner said.
The dollar was little changed against a basket of major six currencies after rising to the highest in two years. The gauge has climbed 22 percent from a record in March. A strong dollar limits the purchasing power of importing nations.
``Grain markets are ready to begin a bottoming process,'' Wagner said. ``The key will be a weaker dollar and improving oil prices.''
Corn is the biggest U.S. crop, valued at a record $52.1 billion in 2007, followed by soybeans $26.8 billion, government figures show.
To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net
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