CHICAGO: US corn futures advanced on Monday on firm cash markets and concerns that another round of showers would stall planting late this week in the US Midwest, where producers are scrambling to catch up after a cool, wet spring delayed field work.
"We'll definitely see pretty healthy plantings the first half of this week, then delays again beginning next weekend," said John Dee, meteorologist for Global Weather Monitoring.
Wheat rose too, rebounding from losses on Friday following a bearish monthly supply and demand report issued by the US Department of Agriculture.
At the Chicago Board of Trade, most-active July corn settled up 19-1/4 cents at $6.55-1/2 per bushel. July soybeans ended up 20-1/4 cents at $14.19-1/4 a bushel and July wheat was up 5-1/2 cents at $7.09-3/4 a bushel.
Technical buying lent support, with most-active July corn surpassing last week's high of $6.52-1/2 and briefly trading above its 50-day moving average of $6.58-1/4.
FIREWORKS IN MAY CONTRACTS AHEAD OF EXPIRATION
The thinly traded May contracts in corn and soybeans rose sharply ahead of their expiration on Tuesday, supported by tight supplies of old-crop US supplies.
May corn settled up 30-1/4 cents at $7.18 after reaching $7.22-1/2, the highest spot corn price since USDA's March 28 quarterly stocks report sent prices tumbling.
Spot May soybeans ended up 32-3/4 cents at $15.21 after touching $15.27-1/4, the highest spot price in six months.
The CBOT has reported no deliveries of soybeans, corn or soymeal during the May delivery cycle, a sign that commercial grain handlers see more value in selling into the cash market than in delivering against futures.
"I don't know how anyone short in May is going to get out other than buy their way out, and that could get pretty tense," said Roy Huckabay with the Linn Group, a Chicago brokerage.
Planting delays added to the strength in the cash market, analysts said. Producers can be reluctant to sell the last of their old-crop harvest until they feel confident about prospects for the new crop, said Dan Cekander, grain analyst with Newedge USA in Chicago.
The USDA was scheduled to release updated crop progress figures in a weekly report later on Monday. A week ago, the department said farmers had planted just 12 percent of their intended corn acres by May 5, the slowest pace since 1984.
A Reuters poll of analysts pegged corn planting progress as of May 12 at 29 percent complete, with estimates ranging from 25 percent to 38 percent complete.
"Psychologically, this (week) is a critical one for getting corn planted. Many analysts claim corn seeded after mid-May tends to see lower yields," said Karl Setzer, a commodity trading adviser with MaxYield Cooperative in West Bend, Iowa.
CBOT December corn, representing the US 2013 harvest, settled up 9-3/4 cents at $5.39-1/4.
The contract had hit a two-week low of $5.22-3/4 on Friday after USDA forecast a record crop that would bolster US stocks to more than 2 billion bushels at the end of next season, above trade expectations, despite reduced yields due to late planting.
US soybean production was projected at a record 3.390 billion bushels with 2013/14 ending stocks more than doubling to 265 million bushels, from the 125 million estimated for the end of this season. The forecast was above trade expectations for 236 million bushels.
WHEAT PRICES ADVANCE
Wheat prices followed corn higher, clawing back some of Friday's losses which followed USDA's larger-than-expected 2013/14 world stocks forecast.
Dealers said the market also derived support from an improving outlook for US exports.
"With European supplies dwindling, US wheat is favourably positioned in the export market, and US exports are now starting to outpace the levels needed to reach the USDA's full-year estimates," Morgan Stanley said in a market note.
Comments
Comments are closed.