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Grains close sharply higher

Updated: 05/09/2011 @ 2:55pm

CHICAGO, Illinois (Agriculture.com)--The dismal crop-weather for wheat supported a rally for farm markets Monday. 

The July corn futures settled 21 1/4 cents higher at $7.07 1/2. The July soybean contract closed 9 cents higher at $13.35. The July wheat futures ended 31 cents higher at $7.90 1/2. The July soybean meal futures settled $0.90 per short ton higher at $350.40. The July soyoil futures closed $0.60 higher at $56.29.

In the outside markets, the NYMEX crude oil is $5.41 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 53 points.

Jack Scoville, PRICE Futures Group vice-president, says hot,dry weather affecting the wheat crop in the HRW states, namely Kansas, is pushing the market higher. "We are recovering today on weather. Midwest weather is ok now, but will get worse fast. So, planting progress will stay slow overall," Scoville says. 

Regarding corn planting, there should have been some pretty good progress over the weekend in western Midwestern areas, less in the east, he says. 

"We could see 30% or so of the corn in the ground. The forecasts should support prices if they are confirmed, the weather will not allow for tons more planting.  No doubt part of the move today is that we got overdone last week, but there is fundamental support to help things along," Scoville says.

For Wednesday's USDA May Stocks and Supply/Demand Reports, market-friendly numbers are expected. "Should be bullish reports on Wednesday, I think. Old crop changes should not be real big, and I think the average trade guesses show a tight situation into next year."

As for Wednesday, one grain merchandiser, requesting anonymity, is unsure how the report will go. 

"I don't know what to think. Probably the biggest question coming in is whether or not they (USDA) show demand as being curbed currently.

I haven't noticed it slowing enough to maintain any type of supply

number at all," the merchandiser says.

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