Cash trade sends corn higher
U.S. corn futures settled higher on stronger cash markets and uncertainty in weather forecasts, with the front-month contract reaching a three-week closing high.
Corn for July delivery rose 9 cents to $6.01 1/2 a bushel at the Chicago Board of Trade. December corn rose 5 1/2 cents to $5.16 a bushel.
Cash-corn markets have strengthened this week after cooling beginning in May. The stronger cash markets, which are lifting futures, reflect strong demand and low availability of supplies harvested last year and put into storage.
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The price of physical corn for June delivery in Decatur, Ill., on Thursday morning was 61 cents above the price of July futures, up eight cents from a day earlier. The price in Peoria, Ill., was 73 cents above July futures, up 13 cents.
"To buy corn in the central belt right now you have to pay at least 70-over," said Tregg Cronin, a market analyst at Country Hedging in Minnesota.
Corn futures also benefited from a shift in weather forecasts to a lower likelihood of rain for much of the corn belt next week. The National Weather Service now predicts above-average chances of rain mid-to-late next week in Michigan and Ohio, but only normal chances of rain in Indiana and Illinois, and below-average chances in western Iowa and Missouri.
While areas like Minnesota in the northwestern part of the corn belt have had sufficient rains, generally hot and dry weather farther south and east in recent weeks has left analysts concerned that the corn crop's potential yield could decline.
"We're really trying to find out what we have for rain following this system mid-to-late next week, which none of the forecasters seem to be putting a ton of faith in," Mr. Cronin said.
Separately, soybean futures closed lower despite strong data released in the morning for both weekly exports and monthly crushings. The weakness was likely caused by speculative funds selling futures to exit long positions, as managed funds hold a large net long position in soybeans, traders said. Some market participants were likely unwinding spreads long on beans and short on corn, traders said.
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