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Prices mixed on report positioning

06/28/2012 @ 4:22pm

Corn futures ended mixed Thursday, while soybean and wheat futures settled lower, pressured by positioning ahead of major government reports due Friday, and weakness in corn prices.

July wheat fell six cents, or 0.8%, to $7.26 a bushel at the Chicago Board of Trade. Kansas City Board of Trade July wheat fell nine cents, or 1.2%, to $7.35 a bushel. MGEX July wheat, a contract with low open interest ahead of its delivery period, rose 23 1/2 cents, or 2.8%, to $8.67 3/4 a bushel.

Grain and soybean futures Thursday "didn't have a wide range, but they did go up and down a fair amount, and go back and forth between plus territory and minus territory...I would say this was liquidating of long and short positions and lightening up going into the report," said Helen Pound, a broker for Knight Execution & Clearing Services LLC.


The U.S. Department of Agriculture will release two key reports Friday at 8:30 a.m. EDT, including the results of a survey of farmers to estimate planted acreage of key crops such as corn and wheat, and a report on the size of inventories of agricultural commodities as of June 1.

Since the two reports are known for causing large price swings in futures, some market participants are hesitant to hold bets before they are issued.

Traders are also often hesitant to hold positions ahead of a weekend during the summer growing season for crops, as shifts in weather forecasts while markets are closed can lead to large moves when they reopen. With the U.S. Fourth of July public holiday also coming on Wednesday next week, traders have multiple reasons to hold back from making bets.

"People might just want to sort of clear the decks and wait until they've got a little bit more running room before they start piling on positions again," Ms. Pound said.

Wheat also fell because a rally in corn futures stalled, traders said. December corn fell slightly after rising sharply earlier this week on worries that hot, dry weather could substantially damage the U.S. corn crop. The rise had lifted wheat since higher corn prices could lead to more demand for wheat to replace corn in animal feed.

In the USDA reports Friday, analysts polled by Dow Jones on average expect an estimate for all wheat plantings of 56.85 million acres, up from 54.41 million acres last year and higher than the agency's last forecast of 55.91 million acres. Analysts on average expect wheat inventories of 726 million bushels, down from 862 million bushels a year earlier.

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