Corn slips on rain outlook
Front-month U.S. corn futures rose Wednesday on worries about tight current supplies, while deferred futures fell on expectations for favorable weather for the growing U.S. crop.
Corn for July delivery at the Chicago Board of Trade settled up 8 1/2 cents at $5.92 1/2 a bushel. December corn fell 12 cents to $5.10 1/2 a bushel.
July futures benefited from worries that their price has fallen too low recently, which could attract more demand, placing further stress on tight current-supply levels.
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In central Illinois Wednesday morning, the price of physical corn for June delivery was 67 cents above the price of July futures. On Wednesday afternoon, the price of physical corn for June delivery to Louisiana export elevators ranged up to 89 cents above July futures, up 6 cents from a day earlier.
The high premium over futures reflects strong demand for spot corn, suggesting low availability of supplies harvested last year and put into storage.
Meanwhile, deferred futures fell on updated weather forecasts showing a greater chance of rain in the corn belt next week.
"Our 6-10 day forecast has shifted slightly wetter today across the Midwest, but looks fairly similar to yesterday's forecast," MDA EarthSat Weather said in a forecast Wednesday. The new forecast shows greater confidence in wetter weather across Missouri, northern Illinois, northern Indiana and Michigan in the six-to-10 day period, the company said. "These areas are all in need of rainfall, so a wetter pattern would certainly be beneficial for the corn and soybean crops."
The U.S. Department of Agriculture has predicted a record U.S. corn harvest this year, and analysts are closely watching forecasts to see if weather conditions are likely to allow for such large production.
Generally dry and hot weather in the last month has left soil in parts of states like Iowa and Illinois in need of more moisture to ensure healthy development of corn crops. Rainfall in the southeastern portion of the corn belt has been spotty.
"We've been seeing a lot of quarter-inch, a lot of three-eighths inch--a lot of sprinkles, not soaking rain, and the forecast is now calling for much better coverage," said David Durra, president of AgSpread Analytics. "I think that was enough to pressure the new crop."
Soybean futures fell Wednesday due to the greater rain expectations in the Midwest, with added pressure from profit-taking on recent gains.
July soybeans fell 26 3/4 cents to $14.08 1/4 a bushel.
Wheat futures mostly ended flat. Lower prices for deferred corn futures weighed on wheat, while support came from lower expected Australian wheat production boosting hopes for U.S. export demand.
CBOT July wheat ended flat at $6.16 a bushel. Kansas City Board of Trade July wheat ended down 1/4 cent at $6.40 1/2 a bushel. MGEX July wheat ended up 9 1/4 cents at $7.73 1/2 a bushel.