Supplies, weather send corn higher
U.S. corn futures rose Monday, boosted by expectations for a government report this week to reflect tight supplies and by a slow start to spring planting activity.
Chicago Board of Trade May corn futures settled up 7 cents, or 1%, at $7.33 1/4 a bushel.
The U.S. Department of Agriculture at noon EDT on Thursday will release two key crop reports estimating domestic grain stockpile levels as of March 1 and how many acres of major crops will be planted by U.S. farmers this year.
Analysts on average expect the USDA to estimate corn stocks of 5.03 billion bushels, down 16% from a year earlier, according to a survey by Dow Jones Newswires. That would be the lowest level since 1998 for corn stocks as of March 1.
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Some analysts expect a low stocks number because they believe demand has been strong in recent months for corn used in animal feed, compounding a lack of supplies available after last year's severe drought widely battered crops. The expectation for tight stocks led market participants to buy corn Monday.
Corn also rose on concerns about cold temperatures and wet weather delaying preparations for spring planting season. The National Weather Service forecasts below-average temperatures and above-average chances of precipitation in the lower Midwest in the next two weeks.
"Guys in Kentucky, Tennessee aren't doing anything yet," said Bill Gentry, an analyst for brokerage Risk Management Commodities in Indiana. "The planting date is not behind yet, but our activity line is behind."
A late start to the planting season could make corn supplies especially tight late in the summer, before the next harvest begins. With tight supplies after last year's drought, "we can't afford to be late this year," Mr. Gentry said.
Corn futures also benefited from a better-than-expected export report. The USDA Monday morning said officials had inspected or weighed for export 17.2 million bushels of corn in the week through Thursday. Analysts had expected inspections of 12 million to 17 million bushels.