Improving weather is allaying concern that a dry spell in Brazil and floods in Argentina may pare output of corn and soybeans used to feed Marfrig Alimentos SA’s and BRF-Brasil Foods SA’ poultry and hogs.
Commodities rose to the highest in two years, led by agriculture futures, after a U.S. Department of Agriculture report last week showed corn production in the country would decline more than expected by analysts.
Stockpiles of the biggest crops will decline for a third year as drought parches fields across three continents, raising food-import costs already forecast by the United Nations to reach a near-record $1.24 trillion.
Corn and soybean traders are bullish for a 15th consecutive week on speculation that the drought spreading across fields in the U.S. will spur the government to make more cuts to its production forecasts.
Commodities are poised to enter a bull market led by surging grain futures amid the worst U.S. drought in half a century and on mounting optimism growth in the U.S. and stimulus from China will boost demand.