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Supplies, weather buoy corn futures

05/09/2013 @ 2:38pm

U.S. corn futures jumped Thursday, reversing from Wednesday's losses on tight supplies and fears about planting delays.

Chicago Board of Trade corn for May delivery settled up 19 1/2 cents, or 2.9%, at $6.94 1/2 a bushel. Corn futures for July delivery, the most actively traded contract, finished up 15 3/4 cents, or 2.5%, at $6.48 3/4 a bushel. The December contract settled up 9 1/2 cents, or 1.8%, at $5.41 1/2.

The "front end" of the market, or contracts for near-term delivery, led prices higher--a signal of how tough it is to acquire physical supplies following the severe drought last year in the U.S., which curbed corn output.

"The cash basis transferred into the futures market today," said Chad Henderson, president of advisory firm Prime Ag Consultants in Brookfield, Wis.

Basis levels--the gap between cash prices for physical supplies and futures--firmed up at many locations across the Corn Belt as end users from processors to exporters continue to push for supplies.

Traders were also nervous that some heavy rains expected to move across the Midwest through Friday could cause additional planting delays. Overall, weather outlooks have improved since last week for corn planting in the Farm Belt.

The market is sensitive to any talk of further planting delays, fearful that farmers won't plant the crop in a timely manner, said John Kleist, senior analyst with brokerage

As of Sunday, only 12% of the nation's corn crop had been planted, the lowest level for that point in the year since 1984. But some analysts are projecting the figure will rise to 30% to 40% by this coming Sunday due to drier weather.

Plantings are "delayed, not denied," Mr. Kleist said. "I think the delays are underscoring the gains [in futures], but it's more traders positioning themselves ahead of a government crop report."

The U.S. Department of Agriculture at noon EDT on Friday is scheduled to update its estimates for the supply and demand of agricultural commodities in a monthly report.

Wheat futures settled higher, fueled by traders shedding bets on prices declining amid views the market was oversold and traders bracing for potentially supportive data in Friday's USDA crop-production report.

Analysts expect the USDA's forecasts to reflect tighter domestic supplies in the coming year, with domestic wheat output this year at 2.059 billion bushels, down 9% from last year.

July wheat futures ended up 17 1/2 cents, or 2.5%, at $7.23 1/2 a bushel at the Chicago Board of Trade. Kansas City Board of Trade July wheat rose 19 cents, or 2.5%, to $7.79 1/4 a bushel. MGEX July wheat finished up 9 1/4 cents, or 1.1%, at $8.25 1/2 a bushel.

Soybean futures ended higher, boosted by tight domestic stockpiles of the oilseed and traders attempting to factor in the impact of slow plantings and current weather conditions on the 2013 crop-production potential.

CBOT soybeans for July delivery, the most actively traded contract, finished up 18 cents, or 1.3% at $14.08 3/4. The November soybean contract settled up 4 3/4 cents, or 0.4%, at $12.19.

Write to Andrew Johnson Jr. at
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(END) Dow Jones Newswires
May 09, 2013 15:21 ET (19:21 GMT)
DJ UPDATE: Tight Supplies, Planting Concerns Lift Corn Futures->copyright

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