CHICAGO (Reuters) - U.S. old-crop corn futures rose on Tuesday, their third straight day of gains, on worries that supplies will run thin before harvest replenishes storage bins and grain elevators, traders said.
New-crop December corn also rose, but gains were muted on expectations that farmers will plant the largest corn area in 75 years as projected by the U.S. government, setting the stage for what could be a record harvest in the fall.
“It is bull spreading in a big way so it has got to be people looking for corn right up front,” said Mark Schultz, chief analyst for Northstar Commodities.
Soybean futures closed lower after a day of choppy trading as investors locked in profits following a two-day rally.
U.S. wheat futures also were mixed, with the old-crop May contract edging higher due to strength in corn. Forecasts for beneficial crop weather in key growing areas, which should raise already ample supplies, weighed down new-crop months.
CBOT May corn settled up 3-1/4 cents at $6.58-1/4 a bushel while the new-crop December contract was just 1/2 cent higher at $5.45-1/2 a bushel.
May corn briefly broke through its 200-day moving average but closed below that key technical point.
The July/December corn spread has widened by 40 percent since the USDA plantings report on Friday morning.
“We have been liking that July/December spread,” said Bill Gentry, a broker for Risk Management Commodities. “The spread trade is probably the backbone of it (the corn rally).”
Private forecaster Informa Economics said it raised its outlook for U.S. corn plantings to 96.4 million acres from 95.5 million. It cut its soybean acreage view to 74.2 million from 75.1 million.
CBOT May soybeans ended down 4-1/4 cents at $14.16-3/4 a bushel.
“It was just profit taking at the end,” said Karl Setzer, analyst with MaxYield Cooperative. “We have rallied a little over 5 percent in the last two days on soybeans, sitting at a seven-month high. We just cannot hold that. There is bullish news out there but much of it is already factored in.”
The new-crop soybean/corn ratio eased slightly to 2.53, still above the 2.5 threshold that the market typically sees a trigger for farmers to plant soybeans instead of corn. But this year’s soybean rally has been viewed as unlikely to entice farmers to switch due to warm weather that allowed for an early start to corn planting.
The fast start to planting buoyed expectations of large corn seedings, followed by a bumper crop, this year. USDA said on Monday afternoon that farmers had seeded 3 percent of their intended corn acreage as of April 1, matching the quickest start on record.
CBOT May wheat was 1 cent higher at $6.58 a bushel. New-crop July wheat dropped 1/2 cent to close at $6.69.
Significant rainfall was being received this week in the U.S. Plains this week, which will further boost growth and development of the hard red winter wheat crop, said Don Keeney, meteorologist for MDA CropCast Weather.
“We’re certainly seeing showers ramp up in the Southern Plains,” Keeney said.
The rain will spread eastward into the southern Midwest and Delta later in the week, helping the developing soft red winter wheat crop.
U.S. winter wheat was rated 58 percent good-to-excellent as of April 1, compared with 37 percent a year ago, according to the USDA’s weekly crop progress report issued on Monday afternoon.
CHG CHG CHG CBOT corn 658.25 3.25 0.5% 1.8% CBOT soy 1416.75 -4.25 -0.3% 18.2% CBOT meal 386.50 -4.70 -1.2% 24.9% CBOT soyoil 55.90 -0.26 -0.5% 7.3% CBOT wheat 658.00 1.00 0.2% 0.8% CBOT rice 1493.00 4.50 0.3% 2.2% EU wheat 211.50 -1.50 -0.7% 4.4%
US crude 104.01 -1.22 -1.2% 5.2% Dow Jones .DJI 13,163 -102 -0.8% 7.7% Gold 1641.60 -35.65 -2.1% 5.0% Euro/dollar 1.3222 -0.0099 -0.7% 2.1% Dollar Index .DXY 79.4500 0.6300 0.8% -0.9% Baltic Freight .BADI 931 -3 -0.3% -46.4%
* In U.S. cents, benchmark contracts, except EU wheat (euros) and soymeal (dollars). CBOT wheat, corn and soybeans per bushel, rice per hundredweight, soymeal per ton and soyoil per lb.
Reporting by Mark Weinraub; Editing by David Gregorio and Bob Burgdorfer