April 27, 2018 / 9:09 PM / in a year

Light to moderate CBOT May corn, soy deliveries seen Monday

CHICAGO (Reuters) - Relatively wide price spreads between Chicago Board of Trade March and May futures contracts should curb deliveries of corn and soybeans against May futures on Monday, which is first notice day, traders and analysts said on Friday.

Rows of corn wait to be harvested in a field in Minooka, Illinois, September 24, 2014. REUTERS/Jim Young

Traders generally expected corn and soybean deliveries of zero to 600 contracts, although one source said deliveries of both commodities could reach 1,000 lots.

Traders estimated deliveries against May soymeal futures at zero to 150 contracts. Expectations for May soyoil deliveries ranged widely, from 300 to 1,500 lots.

Most brokers expected no deliveries against CBOT May soft red winter wheat futures, citing firm cash markets that should discourage commercial firms from delivering against futures. For K.C. May hard red winter wheat, traders expected zero to 500 deliveries.

The CBOT May soybean contract settled Friday at a discount of 11-1/4 cents to the July contract. The cost of storing soybeans from May to July, including interest rates, or “full carry,” is 16 to 17 cents per bushel, traders estimated.

For corn, the May contract closed at a discount to the July of 9 cents, while full carry is 12 to 13 cents.

The fact that the price spreads were near full carry should limit deliveries by encouraging commercial firms to carry their positions forward.

During a contract’s delivery period, which lasts two to three weeks, the futures market acts like a cash market. Companies holding short positions in May futures can issue intentions to deliver the physical commodity. Traders holding the oldest-dated longs must accept delivery.

Traders closely monitor deliveries. A large number of deliveries tends to pressure the price of a nearby futures contract, while a small number would tend to support prices.

As of Thursday night, the exchange reported 1,034 corn contracts registered for delivery, along with 1,186 contracts of soybeans, 150 contracts of soymeal, 3,386 contracts of soyoil, 25 contracts of Chicago wheat and 381 contracts of K.C. wheat.

Commercial companies have until 4 p.m. CDT (2100 GMT) to register additional CBOT contracts for delivery.

Reporting by Julie Ingwersen; Editing by Marguerita Choy

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