Soybeans, corn surge on supplies, weather
U.S. soybean futures rallied Tuesday, climbing amid tight short-term supplies and uncertainty about how the weather could impact farmer planting in the month ahead.
Prices climbed amid a lack of fresh news, as traders begin looking ahead to a monthly government supply report scheduled to be released Friday. Corn and wheat also gained, with support from soybeans and crop concerns supporting the market.
Tight near-term domestic supplies are supporting the soybean market, as large processors including Archer Daniels Midland Co. (ADM) and Cargill Inc. signal that soybeans could be tough to come by until the next harvest in the fall.
"We know we're dealing with a very tight domestic balance sheet for the soybeans," said Mike North, an adviser with First Capitol Ag, a Wisconsin brokerage.
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Soybean futures for July delivery at the Chicago Board of Trade ended up 13 cents, or 0.9%, to $13.82 1/4 a bushel.
Soybean and corn traders are watching weather forecasts for a clearer signal on whether corn planting, which is off to its slowest start in nearly 30 years, according to the U.S. Department of Agriculture, will start to pick up.
Continued delays to corn planting could mean that more farmers are forced to abandon their corn planting plans and instead seed soybeans, which have a later growing season. That dynamic has been supportive to corn prices, but negative for soybeans. Farmers are reluctant to plant corn too late because it is at greater risk of crop-damaging heat or and early fall frost.
Complicating the outlook is that while corn planting is clearly behind schedule, new, larger machinery allows farmers to plant a large amount of corn in a short period of time.
"The big picture is we are as a trade talking about late planting in corn, but also talking about the amazing capacity to put corn in the ground," Mr. North said.
July CBOT corn settled up 3 1/2 cents to $6.40 a bushel. Analysts said the market was underpinned by midday weather forecasts showing weather slightly less favorable for planting in the days ahead in parts of the Midwest.
Wheat prices gained amid a pessimistic outlook for the winter wheat crop. The USDA in a weekly report Monday showed crop conditions continued to deteriorate thanks to dryness and, more recently, freezing weather. Nearly three-quarters of the hard red winter wheat crop in Texas was rated poor or very poor.
July wheat at the CBOT ended up 0.9%, or 6 1/4 cents, to $7.09 a bushel. Kansas City Board of Trade July wheat gained 1 1/4 cents to $7.58 a bushel.
Traders are looking ahead to this week's supply and demand report from the USDA. The monthly report is scheduled to be released at noon EDT on Friday.
Write to Ian Berry at email@example.com
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(END) Dow Jones Newswires
May 07, 2013 15:21 ET (19:21 GMT)
DJ Tight U.S. Supply Boosts Soybean Futures, Corn Gains on Planting->copyright
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