Corn Jumps for Second Day as Dry Weather Damages Argentine Crop

By Jae Hur

Jan. 20 (Bloomberg) -- Corn climbed for a second day and to a one-week high on speculation dry weather will damage crops in Argentina, the world’s second-biggest exporter of the grain after the U.S.

Topsoil drying, and heat and dry stress will be notable through Jan. 24 as temperatures rise across Argentina, Mike Tannura, a meteorologist for T-Storm Weather in Chicago, said in an e-mail yesterday. Rain is unlikely with only a marginal chance of rain early next week when temperatures cool, he said.

“Dry conditions in Argentina are the main concern for the corn crop there,” Takaki Shigemoto, an analyst at Tokyo-based commodity broker Okachi & Co., said today. “For soybeans, we may see a technical correction after recent gains.”

Corn for March delivery added 5.5 cents, or 1.4 percent, to close at $3.965 a bushel in electronic trading, the highest compared with closing prices since Jan. 9. U.S. trading was closed yesterday for Martin Luther King Jr. Day.

The grain dropped 4.8 percent last week after the U.S. government on Sept. 30 forecast global reserves will rise to the highest since 2002. The price has fallen 50 percent from a record $7.9925 in June.

Soybeans for March delivery slipped 0.25 cent to $10.1975 a bushel. The contract lost 1.5 percent last week, the first drop in six weeks.

Wheat for March delivery slipped 0.25 cent to $5.78 a bushel. Wheat futures have tumbled 55 percent from a record $12.75 on March 13.

On Euronext Paris, milling wheat for March slipped 25 cents, or 0.2 percent, to 150.75 euros a metric ton.

Wheat May Gain

Wheat may advance to $7.30 a bushel by the end of this year as demand continues to increase and farmers respond to slumping prices by planting fewer acres, Commerzbank AG said in a report yesterday.

The grain’s immediate potential to gain is limited because of an expected surplus of about 30 million tons this year, Frankfurt-based analysts Eugen Weinberg, Barbara Lambrecht and Carsten Fritsch said in a note to investors yesterday. They forecast higher prices in the “medium term,” citing rising consumption and reduced plantings.

Corn may jump to $6 a bushel, assuming economies improve during the year and oil prices rise, Commerzbank said. Soybeans may rise to $12 a bushel in the next 12 months on continued demand from China, the analysts said.

To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net