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GRAINS-Weather woes send wheat to 2-month high; corn jumps

Published 04/25/2011, 03:18 PM
Updated 04/25/2011, 03:20 PM
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* Harsh weather threatens wheat and corn output

* Drought trimming US HRW wheat prospects

* Wet weather slows US/Canada spring wheat seedings

* Wet weather stalling US corn plantings

* Coming up: USDA's weekly crop progress report (Recasts to include close of U.S. trading session, adds details and quotes on crop weather)

By Sam Nelson

CHICAGO, April 25 (Reuters) - U.S. wheat jumped 3 percent to a two-month high on Monday and corn rose 3 percent, notching its biggest percentage gain in three weeks, as harsh weather threatened production of both crops.

"It's all weather. The two-week forecast doesn't look good for corn planting. It indicates we could lose corn acreage," said Terry Reilly, an analyst for Citigroup.

Soybean prices rose on spillover buying from the big gains in wheat and corn.

While drought is damaging the U.S. winter wheat crop and threatening production levels, excessively wet weather is hampering spring seedings of wheat and corn.

"Corn planting has stalled as a result of the heavy rains. The active rains should continue across the Midwest and northern Delta through mid-week, keeping fieldwork stalled and flooding prevalent," said Don Keeney, agricultural meteorlogist for MDA EarthSat Weather.

The U.S. Department of Agriculture was scheduled to release its updated weekly crop progress report Monday afternoon. Analysts' on average expected U.S. corn plantings at 13 percent, below the five-year average of 22 percent and well below the 50 percent planted at this time a year ago.

Although plantings are behind schedule, there is still time for farmers to plant corn and realize good yield per acre. As a general rule, corn yield potential should not decline until plantings are delayed past mid-May.

CBOT wheat for May delivery was up 26-1/2 cents per bushel at $8.26, May corn was up 25-1/4 at $7.62-1/2 and May soy was up 9 cents at $13.89-1/2.

Wheat prices are now less than 7 percent below their post-2008 peak from February. Corn is struggling to restart its nearly year-long rally that topped out several weeks ago, with signs of demand rationing in the ethanol and feed industries.

Keeney said a few showers would move through the U.S. Plains winter wheat region this week but the rainfall would be limited.

"A dry pattern is expected to return to the central and southern Plains by next week which will allow moisture shortage and stress to increase once again," he said.

Kenney also said current dry weather is a problem for crops grown in the North China Plain and in central and northwest Europe. (Reporting by Sam Nelson, additional reporting by Mark Weinraub and Suzanne Cosgrove in Chicago; editing by Jim Marshall)

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