Chicago | Reuters — U.S. corn and soybean futures rose on Tuesday as traders squared positions a day ahead of a monthly U.S. Department of Agriculture report in which the government is expected to pare its stocks forecasts for both crops, traders said.
Wheat followed corn and soy higher, bolstered by updated midday forecasts that no longer saw as much rain as had been expected next week in the southern U.S. Plains.
At the Chicago Board of Trade, May corn settled up 7-3/4 cents at $5.07 per bushel after reaching a one-week high of $5.07-3/4 (all figures US$).
May soybeans ended up 18-1/4 cents at $14.82-1/2 a bushel, while May wheat rose 4-3/4 cents at $6.81 a bushel.
Trade was disrupted late in the session when the CME Group’s Globex electronic system shut down due to technical issues. Trading continued in the open outcry pits. CME Group is the parent of the CBOT.
Corn posted the biggest percentage gains of the three main commodities. USDA in its monthly supply/demand report on Wednesday is likely to lower its forecasts of U.S. 2013-14 corn and soybean ending stocks due to robust exports, according to analysts surveyed by Reuters.
“Much of what we are seeing is simple positioning ahead of tomorrow’s supply and demand report,” said Karl Setzer, a market analyst at the MaxYield Cooperative in West Bend, Iowa. “Current U.S. corn sales are two million bushels greater than USDA expectations,” Setzer added.
Corn drew additional support from a sluggish start to planting in the heart of the U.S. Corn Belt, where soil temperatures are still too cold after a harsh winter.
“The weather outlook for planting is slowly improving, but also offers enough potential delays to keep concerns elevated,” Citigroup futures specialist Art Liming wrote in a market note.
“Planting in the Delta and Southeast has been put mostly on hold by recent downpours, and the region is expected to see further precipitation before field work can progress,” Liming said.
Gains were limited by news that China’s quarantine bureau approved corn imports from Brazil, adding to a growing list of suppliers competing for shipments to the second-largest consumer of the grain.
Soybeans rose on expectations that USDA on Wednesday will cut its outlook for U.S. 2013-14 soybean ending stocks to 139 million bushels, the smallest in five years. USDA also was expected to cut its forecast for the Brazilian soybean harvest to 87.43 million bushels.
Wheat rallies, Plains weather eyed
Wheat rallied from early declines after updated midday weather forecast models looked drier in the southern U.S. Plains production belt.
“The six- to 10-day (period) had a lot less shower activity in the central Plains — Nebraska, Kansas, Colorado, and even northern Oklahoma were all drier,” said Joel Widenor, a meteorologist with the Commodity Weather Group.
The region’s hard red winter wheat crop is reaching the jointing stage of growth and will need increasing amounts of water in the coming weeks as it matures.
After the close of trade, USDA said in its first weekly crop progress report of 2014 that 35 per cent of the U.S. winter wheat crop was in good to excellent condition, down from 62 per cent in November, ahead of the crop’s winter dormancy.
The rating was also down from a year ago, when USDA rated 36 per cent of the crop as good to excellent.
Ratings in Kansas, the top U.S. wheat state, fell for a fourth straight week, with 29 per cent of the state’s crop rated good to excellent.
— Julie Ingwersen is a Reuters correspondent covering ag commodity markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.