Chicago Board of Trade (CBOT) corn futures fell for the second consecutive trading session on Tuesday on forecasts for better U.S. corn planting weather beginning this weekend and on recent rainfall that eased drought concerns and boosted production prospects.
The CBOT new-crop December corn futures contract, the month most sensitive to 2013 U.S. planting and growing weather, fell to a 10-month low, trading down 10-1/4 cents per bushel at $5.22-3/4 (all figures US$).
U.S. corn plantings have been stalled due to wet and cold weather but the rainfall also has added valuable moisture to drought-stricken soils.
“The story has been delayed plantings and now the focus is shifting to the weekend and next week and much better planting weather,” said Rich Nelson, chief strategist for Illinois-based research and advisory firm Allendale Inc.
Wheat also declined for the second consecutive trading session on prospects for improved crop growing weather soon while nearby or spot May soybeans turned higher, reversing two days of declines, on strong cash soybean and soymeal markets.
CBOT corn for May delivery was down 7-1/4 cents per bushel at $6.38-1/2, May wheat was down 4-3/4 at $6.97-1/2 and soybeans for May delivery were up 2-1/2 at $14.19-3/4.
Showers will linger in the Midwest on Thursday and there will be more rain on Friday and Saturday in the southern Midwest, said Don Keeney, meteorologist for MDA Weather Services.
“Conditions will definitely change next week. It will be much warmer and much drier next week,” Keeney said.
The U.S. Department of Agriculture (USDA), in its weekly crop progress report released late on Monday, said only four per cent of the U.S. corn crop had been planted, up from two per cent a week ago but well behind the 16 per cent five-year average seeding pace.
Thirty-five per cent of the U.S. winter wheat crop was in good-to-excellent condition, down from 36 per cent a week ago and well below the 63 per cent of a year ago.
And, only seven per cent of the U.S. spring wheat crop had been planted, up from six per cent a week ago but well behind the 24 per cent five-year average.
CBOT new-crop November soybeans also were lower, down 6-1/2 cents per bushel at $11.96-1/4 on the improved U.S. crop prospects but the old-crop spot May held to gains trading up 2-1/2 at $14.19-3/4.
“The strong bean basis and meal basis are kind of the last remaining bullish factors here,” the trader said.
Soybean spot cash basis bids jumped to the highest levels ever for this time of the year around the U.S. Midwest as the domestic stockpile tightened amid a slow pace of export shipments from South America, dealers said.
“In soybeans we’re trading the tight stocks and demand hasn’t slowed. The strong cash market is leading the way up,” Nelson said.
Additional pressure on the wheat market came from signs of slowing economic growth in China.
“Other than reports of better weather conditions, poor demand from China is also a factor behind both corn and wheat being down,” said Ker Chung Yang, commodities analyst at Singapore-based Phillip Futures.
Growth in China’s vast factory sector dipped in April as new export orders shrank, a preliminary survey of factory managers showed on Tuesday, suggesting China still faces formidable global economic headwinds into the second quarter.
China is the worlds largest importer of soybeans and is often a big consumer and buyer of other agricultural commodities such as wheat and corn.
— Sam Nelson reports on the CBOT grain and soy futures markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hirtzer in Chicago and Nigel Hunt in London.