New-crop corn surges on planting worries
U.S. corn futures finished mixed Wednesday, with "new crop" futures like the December contract, which represents supplies that will be harvested in autumn, settling at a nine-week high on planting worries.
Chicago Board of Trade corn for July delivery, the most actively traded contract, finished down 1 1/2 cents, or 0.2%, at $6.65 a bushel. The December contract settled up 14 3/4 cents, or 2.7%, at $5.65 3/4.
Traders are concerned that heavy rainfall in the U.S. Farm Belt will keep farmers from planting as much corn as they had intended. Some traders now think as many as 2 million or 3 million acres of corn could be lost. The U.S. Department of Agriculture has estimated corn acreage would top 97 million acres this year, the most since the 1930s.
"Investors are pricing in poor weather for planting," said Tim Hannagan, an analyst with Walsh Trading Co. in Chicago. "The weather looks miserable, and that threatens the seeding of remaining corn acres that need to be planted," Mr. Hannagan said.
VIDEO: Critical Weather for Corn Planting
MORE VIDEOS >>
After an extremely wet weather event during the previous weekend, the Midwest will receive another 1 to 3 inches of rainfall through Saturday, said Mike Palmerino, meteorologist with Telvent DTN, an agricultural media company.
The Farm Belt will only have a 48-hour window of dry conditions starting Sunday, before rains return to the Midwest by midweek, Mr. Palmerino added.
Traders are factoring in the risk of U.S. farmers either opting not to plant corn crops and take prevent-plant insurance payments, plant shorter-season variety corn, or switch intended acres to soybeans due to rain forcing late plantings.
"New crop" futures were also supported by traders taking profits on prior bets that contracts for near-term delivery would advance at the expense of contracts for delivery later in the year.
Soybean futures ended mixed, with contracts for near-term delivery pressured by traders taking profits on Tuesday's explosive gains. Investors dialed back buying interest on signs of slowing demand.
The cancellation of 147,000 metric tons of prior purchases of U.S. soybeans by China served as a drag on prices. Traders were concerned the cancelled sales by China, the world's leading importer of soybeans may signal a trend in cancellations with China turning to cheaper South American supplies.
CBOT soybeans for July delivery, the most actively traded contract, finished down 7 1/2 cents, or 0.5% at $15.01 3/4. The November soybean contract settled up 1/2 cent, or 0.04%, at $12.88 1/2.
U.S. wheat futures finished higher Wednesday, reversing Tuesday's losses. The market was supported by concerns about the health of wheat crops in the southern U.S. Plains and concerns about planting delays for spring wheat crops in the northern Plains.
July wheat futures ended up 9 cents, or 1.3%, at $7.02 3/4 a bushel at the Chicago Board of Trade. Kansas City Board of Trade July wheat rose 4 1/4 cents, or 0.6%, to $7.47 3/4 a bushel. MGEX July wheat finished up 9 1/4 cents, or 1.1%, at $8.15 3/4 a bushel.
Write to Andrew Johnson Jr. at firstname.lastname@example.org
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
May 29, 2013 15:28 ET (19:28 GMT)
DJ Corn Futures End Mixed, 'New Crop' Rise on Planting Fears->copyright
Sign up for our Market Email Alerts!