U.S. corn futures fell 1.4 per cent on Thursday on optimism over seeding progress and prospects for the new crop, while soybeans rose on tight U.S. supplies, traders said.
Wheat fell on technical selling and seasonal pressure as the U.S. harvest neared, with the Chicago Board of Trade July contract hitting a six-week low.
At the CBOT, July corn ended down 9-1/4 cents at $6.41-1/2 per bushel after finding support at its 20-day moving average of $6.40-1/4. July soybeans settled up 14-3/4 cents at $14.27-1/2 after reaching $14.31, the contract’s highest level since March 28.
Trade was thin, and rumours swirled of a hedge fund buying soybeans and selling corn.
“Supposedly there was a big hedge fund in London that was buying beans and selling corn on ratio spreads, big time,” said Charlie Sernatinger with ED+F Man Capital in Chicago.
Others cited favourable U.S. planting weather for corn. Farmers in the Midwest have been planting frantically this week, taking advantage of mostly sunny skies to catch up after a historically slow start this spring.
“Finally we will see some solid progress on corn planting this week, before it gets wet again over the weekend and pushes the farmers out of fields,” said Joyce Liu, an analyst at Phillip Futures.
Rains this weekend and early next week are likely to stall their progress but also add beneficial soil moisture.
“Today’s planting delays become tomorrow’s moisture and will help the crop get established,” said Jim Gerlach, president of A/C Trading in Fowler, Indiana.
Traders also appeared to be taking profits in long July/short December spread positions in corn following the expiration of the CBOT May contract this week, Gerlach said.
Weekly export sales data for corn was disappointing, adding pressure on prices. The U.S. Department of Agriculture reported corn export sales for the 2012-13 and 2013-14 marketing years at 258,500 tonnes, a 10-week low.
Soybeans higher on firm cash market
Soybeans advanced, led by nearby contracts on strength from the U.S. cash market. Domestic soy processors continue to pay historically high basis levels to draw out the last of the 2012 soybean harvest from the country.
Processors are finding good demand for soymeal, a high-protein animal feed, and crushing margins remain high while old-crop soybeans are scarce.
“Things are still extremely tight. The delayed planting really pushed the window back further as far as the arrival of the new crop,” said Gerlach.
“Beans are where you are going to see the greatest amount of problems in terms of sourcing later this summer.”
Wheat prices declined as the Northern Hemisphere winter wheat harvest approached, a time of seasonal market pressure. Weekly U.S. wheat export sales totalled 540,700 tonnes, a three-week low.
CBOT July wheat finished down 6 cents at $6.87-3/4 a bushel.
Additional pressure stemmed from some forecasts for much-needed rain in Russia, where dry conditions are threatening crop prospects.
“Showers were 0.1 to 0.5 inch (0.25 to 1.25 cm) in Ukraine yesterday but will be increasing there and in southern Russia. As much as 75 per cent of (the) belt is likely to see needed showers in the next five days, averting wheat stress and aiding corn/sunflower stands,” the Commodity Weather Group, a U.S. forecaster, said in a daily note.
However, Russia’s state forecaster said hot and dry weather would persist in the coming days, with a high possibility of wildfires in the Southern Federal District, the country’s main wheat exporting region.
Kansas City Board of Trade wheat futures followed CBOT wheat lower but Minneapolis Grain Exchange spring wheat futures ended mixed, underpinned by a lack of farmer selling.
“The northern U.S. Plains farmer has significant on-farm storage… and is notorious for holding on to his wheat,” said Austin Damiani, a broker with Frontier Futures in Minneapolis.
— Julie Ingwersen reports on the ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.