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New corn, old beans close higher

05/20/2013 @ 8:37am

DES MOINES, Iowa (Agriculture.com)--The spreading of old crop vs. new crop contracts pushed the corn and soybean markets to a two-sided finish Monday. 

Also, new-crop contracts felt the pressure from a higher planting rate expected in this afternoon's Crop Progress Report at 3pm CT. 

The July futures corn contract closed 3 cents lower at $6.49. New-crop Dec. futures finished 1 cent higher at $5.20. The July soybean futures contract closed 16 cents higher at $14.64, new-crop Nov. soybeans finished 3 cents lower at $12.25. July wheat futures finished 2 cents higher at $6.85per bushel. The July soymeal futures settled $10.20 per short ton higher at $435.30. The July soyoil futures closed $0.32 lower at $49.20.
In the outside markets, the NYMEX crude oil is $0.83 per barrel higher, the dollar is lower and the Dow Jones Industrials are 7 points lower.

Traders are determined to push the July/Nov bean spread to 2.47, July over the Nov. If it happens, this would be an historic high, according to Tim Hannagan, senior grain analyst with Walsh Trading Co.

"At that point, we could see some month-end profit-taking by funds, before they push that bull spread even higher into June. June will keep old crop July firm on tight ending stocks and little to no farmer sales, while Nov weakens on planting progress and talk of less corn acres and more bean acres to be planted," Hannagan says. 

Upper Plains states continue overly wet, suggesting time to plant corn will run out in 10 days, he says. 

"This leaves them switching to beans which can be planted on time up to June 10. Minnesota was to plant 9 million acres this year, a state record, yet they look to get another 3 to 4 inches of rain the next four days, keeping planters idle until next week. They were only 18 % planted last Monday versus the national average of 28%.  This all looks to keep a floor under July bean futures today, but strength into the week."

Sue Mortensen, Advantage Ag analyst, says the old crop/new crop spreads can continue into the July delivery period.  "Traders will watch the amount (cents per bushel) that cash is over the delivery equivalent.  As long as cash trades at a higher level than DVE, traders will feel comfortable holding futures contracts.  We will see waves of cash selling that should pressure the spreads occasionally," Mortensen says.

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