Corn prices rise on heat worries
DES MOINES, Iowa (Agriculture.com)--Unfavorable crop weather pushed the CME Group corn, soybean and wheat markets sharply higher Monday.
The July corn futures settled 20 cents higher at $5.99 1/2, while the Dec. contract settled 28 cents higher at $5.34. The July soybean contract ended 8 1/4 cents higher $13.84 3/4, while the Nov. 2012 contract finished 25 1/4 cents higher at $13.39 1/2. The July wheat futures finished 20 3/4 cents higher at $6.30 1/4. July soyoil futures finished $0.32 higher at $48.76. The July soymeal futures finished $2.80 higher at $412.90.
In the outside markets, the NYMEX crude oil is $0.74 per barrel lower, the dollar is higher and the Dow Jones Industrials are 10 points lower.
Joe Bedore, FC Stone Inc.'s CME Group floor manager, says the hot/dry weather is underpinning the farm markets Monday.
"I think the wind that accompanied weekend rain events, has the market thinking those rains were not as beneficial as they could have been," Bedore says. Plus, we are looking at a 6-10 day forecast of hot and dry. That is even more price-supportive."
Most marketwatchers feel like when Dec. corn futures got down to $5.10 that it was a bargain and started buying it, Bedore says.
Meanwhile, the old-crop July corn futures contract is gaining on the previous leading Dec. contract. This supports the idea that there isn't much corn in the hands of farmers, he says.
"July was lagging behind Dec. futures prices by 4-5 cents. And now all of the sudden the two contracts are even. So, that old-crop corn issue is still out there," Bedore says.
To end the week, a rumor that Brazil was exporting corn to the U.S. circled the trade floor. That rumor is believed to be false, Bedore says.
"It doesn't figure. Cost-wise, It pencils out to be worth it. But, because of Brazil's infrastructure, the shipment would take 55 days to get to the U.S. For that reason, the market doesn't believe the rumor," Bedore says.
The corn would have to land in Norfolk, Virginia, due to the rumored potential buyers. Hog producer Smithfield has denied any corn purchases from Brazil. That leaves poultry producer Purdue, but that is seen as unlikely, he says.