US corn finished mixed on Thursday, shaving earlier losses with hot weather moving into the US Midwest and threatening to scorch vulnerable crops. Chicago wheat prices fell in a setback after a two-day rally that boosted the September contract by 12 percent. Soybeans rose as traders unwound spreads against corn and US export sale levels came in slightly higher than expected.
A ridge of high pressure is expected to move into the Midwest this weekend, bringing harmful heat to the corn crop during its key pollination period, a forecaster said. "We are definitely going into a period of more stressful weather for corn - both corn that will be pollinating, and also corn that was planted late, that does not have a good root system," said Mike Palmerino, agricultural meteorologist with Telvent DTN.
The heat should ease by July 23 or 24, forecasting models showed, not persist into the following week as indicated earlier. Some traders cited that revision for corn's earlier weakness. "Looks to me like there's still a fair amount of heat and dryness in the forecast," said Marty Foreman, analyst for Doane Advisory Services. "People were a little reluctant to stay short in the face of that kind of a forecast."
The US Department of Agriculture forecast US corn supplies on Tuesday to fall to a 15-year low before the autumn harvest. "There is no room for mistakes this year - a two-bushel-per-acre decline gets us back down to pipeline supply," said Mary Ann Kwiatkowski, analyst for Amber Trading.
Chicago December corn eased 1-1/4 cents to $6.78-1/2 per bushel, while the nearby September contract gained 4 cents to $6.90-3/4 amid tight cash supplies. Chicago Board of Trade wheat for September delivery fell 1.1 percent, or 7-1/2 cents, to $7.07 per bushel, paring losses in late trading. Wheat traded in Minneapolis and Kansas City fared better, after lagging Chicago's gains on Wednesday when investors covered shorts of soft red winter wheat in spread trades against the higher-protein classes.
Minneapolis September spring wheat rose 1 percent, while the same contract month in Kansas City was firm. New-crop November soybeans gained 0.3 percent, or 4-1/4 cents, to $13.84 per bushel. Commodities weakened overall, with the Reuters-Jefferies CRB index, a commodity performance benchmark, falling more than 1 percent.
Crude oil, which influences corn and soybeans through their use in biofuels, turned negative after US Federal Reserve Chairman Ben Bernanke said on Thursday he was not yet ready to take more monetary easing action. The central bank's musings a day earlier about further fiscal stimulus had ignited a rally in commodities, which stand to gain investments from new money in the economy.
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