CHICAGO, May 13 (Reuters) – U.S. corn futures advanced on Monday on firm cash markets and concerns that another round of showers would stall planting late this week in the U.S. Midwest, where producers are scrambling to catch up after a cool, wet spring delayed field work.
“It will be dry until near midweek, then light rains will cause some delays, not serious delays, Wednesday into the weekend,” said John Dee, meteorologist for Global Weather Monitoring.
Dee said heavier rainfall was expected beginning Sunday into early next week that would shut down plantings again throughout the Midwest. “We’ll definitely see pretty healthy plantings the first half of this week, then delays again beginning next weekend,” he said.
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Wheat rose too, rebounding from losses on Friday following a bearish monthly supply and demand report issued by the U.S. Department of Agriculture.
At the Chicago Board of Trade as of 10:40 a.m. CDT, most-active July corn was up 18-3/4 cents at $6.55 per bushel. July soybeans were up 12-1/2 cents at $14.11-1/2 a bushel and July wheat was up 10-3/4 cents at $7.15 a bushel.
Technical buying lent support, with most-active July corn surpassing last week’s high of $6.52-1/2 and nearing chart resistance 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 were up sharply ahead of their expiration on Tuesday, supported by tight supplies of old-crop U.S. supplies.
May corn was up 26-3/4 cents at $7.14-1/2, a six-week high spot price. May soybeans rose up 22-1/2 cents at $15.10-3/4, the highest spot price in two 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 U.S. 2013 harvest, rose 1.5 percent to $5.37-1/2.
The contract had hit a two-week low of $5.22-3/4 on Friday after USDA forecast a record crop that would bolster U.S. stocks to more than 2 billion bushels at the end of next season, above trade expectations, despite reduced yields due to late planting.
U.S. 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.
Analysts also noted that plantings could make rapid progress if conditions improve.
“U.S. farmers have technology at hand to put in corn and soybean seed in a few days. It has to be too cold and too wet for five weeks in a row to substantially reduce crop expectations,” Tiberius Asset Management said in a report.
WHEAT
Wheat prices clawed back some of Friday’s losses which followed USDA’s larger-than-expected 2013-14 world stocks forecast.
Dealers said the market derived support from an improving outlook for U.S. exports.
“With European supplies dwindling, U.S. wheat is favourably positioned in the export market, and U.S. exports are now starting to outpace the levels needed to reach the USDA’s full-year estimates,” Morgan Stanley said in a market note.
