US corn futures set back on Friday on profit-taking after extending a 32-month high, but the market nonetheless posted its fifth straight weekly rise as US supplies remained tight. Soybeans were choppy, rallying late on concerns about labour unrest at ports in Argentina and harvest delays in Brazil.
The market fell sharply at midsession after analytical firm Informa Economics raised its estimate of the South American soy crop. Wheat also recovered after seesaw trade, led by the regional markets in Kansas City and Minneapolis on concerns about tight supplies of high-quality milling wheat. Intermarket spreads played a role, with corn pressured as investors exited long corn/short wheat and long corn/short soybean positions ahead of the weekend. Volume was light, with trade in corn down about 20 percent from the 30-day average. Volume in wheat and soybeans was down by roughly one-quarter to one-third of the 30-day average.
At the Chicago Board of Trade, May corn ended down 8-3/4 cents at $7.28 per bushel. May soybeans settled up 2 cents at $14.14 per bushel and May wheat was up 8-3/4 cents at $8.32-1/4 a bushel. Corn fell as traders booked profits after the spot March contract rallied to a contract high of $7.35 a bushel, the highest spot corn price since July 2008.
Yet corn ended the week higher for its fifth straight weekly gain, bolstered by concerns about tight supplies persisting into the 2011/12 marketing year. The US Department of Agriculture has forecast that US corn stocks will hit a 15-year low by August 31, the end of the 2010/11 marketing year. "We may be looking at profit-taking ahead of the weekend, but this still will be the highest weekly close since 2008," said Rich Nelson, analyst with research firm Allendale Inc.
"The short-term stories are still nothing but bullish for this market," he added. Soybeans settled modestly higher and posted their first weekly rise in four weeks. Nearby contracts gained on concerns about harvest delays in Brazil and labour unrest in Argentina.
A wage protest paralysed two major Argentine soy-processing terminals in the Rosario area this week, preventing about 20 ships from loading. Argentina is the world's biggest supplier of soyoil and soymeal, and No 3 in soybean exports after the United States and Brazil. Rains in Brazil have slowed the early harvest, raising the prospect that China, the world's biggest soy buyer, would turn to US soy supplies to meet spot needs.
Underscoring that idea, USDA said private exporters reported optional origin sales of 120,000 tonnes of 2010/11 soybeans to China. Soy futures dipped sharply at midsession after Informa raised its estimate of Brazil's soybean crop to 71.4 million tonnes, up 2.1 million tonnes from its previous forecast. Informa also pegged the Argentine soybean harvest at 52 million tonnes, up from 49 million previously.
"Those are large numbers, if proven correct," said Dan Cekander, an analyst with Newedge USA in Chicago. CBOT wheat settled higher and plotted its first weekly gain in three weeks as futures rose at the Kansas City Board of Trade and the Minneapolis Grain Exchange.
Concerns about a shortage of high-quality wheat lifted the two regional markets. KCBT traders eyed dry soil conditions that were threatening yield prospects in western sections of the US Plains hard red winter wheat belt. MGEX wheat rose as cash values for high-protein spring wheat firmed at export terminals in the Pacific Northwest. Traders said trains shipping spring wheat from the Dakotas to the West Coast were running three to four weeks behind.