Corn Powers to $5 and Soybeans Spike 

(Bloomberg) -- Corn climbed to $5 a bushel and soybeans rallied for a sixth day, driving futures to fresh six-year highs, as Argentine growers are set to halt sales for three days to protest against government measures and drought inflicts increasing pain on crops in South America.

Farmer groups in Argentina, the world’s third-largest corn exporter and the top shipper of soy products, intend to stop grain sales from Jan. 11-13 to show their opposition to the government’s suspension of corn exports, a move designed to protect supplies on the domestic market.

“The dangers to global corn production are clear and present,” Rabobank analysts including Stefan Vogel wrote in a note. “La Nina-related dryness in Argentina and portions of Brazil is shaving 1 to 2 million tons from production estimates every week,” it said. “U.S. ending stocks will hit 7-year lows and don’t have much room to handle the burden of South American harvest issues.”

While most of Argentina’s fields will remain dry through Saturday, soybean crops in southern Brazil are set to benefit from rains, according to Don Keeney, senior agricultural meteorologist at Maxar. StoneX cut slightly its soybean estimate for Brazil, citing December dryness in the nation’s top growing state.

Hedge funds boosted net-bullish bets on soybeans to a five-week high as of late December, data showed. Meanwhile, CME Group raised futures margins for soybeans, soyoil, soymeal, corn, wheat and Kansas City wheat contracts.

Rising Chicago prices have driven up the most actively traded soymeal contract on the Dalian exchange, as increased costs faced by domestic crushers filter through to products, said Zhu Liang, analyst with Chaos Ternary Futures. The recovery of hog herds from African swine fever has contributed to booming demand in the country for corn and soymeal.

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