Chicago Board of Trade (CBOT) wheat, corn and soybean futures fell roughly one per cent each on Monday on forecasts for better crop weather across a broad swath of the soggy U.S. crop belt, traders said.
Cold and wet weather had been threatening crop prospects but also added valuable moisture to drought-stricken soils. And now a turn to warmer and drier weather by early May, as forecast by agricultural meteorologists, will help boost crop production while also pressuring prices, they said.
A Chinese customs report showing tepid imports of oilseeds and cereals in March also lent pressure to wheat, corn and soybean futures prices.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
CBOT May wheat was down 6-3/4 cents per bushel at $7.02-1/4, May corn was down 6-1/4 at $6.45-3/4 and May soybeans were down 11 at $14.17-1/4 (all figures US$).
Excessive rainfall and cold weather over the past two weeks has slowed corn plantings and harmed some of the winter wheat crop. But the rains also added valuable soil moisture ahead of the 2013 planting and growing seasons, leading to prospects for bumper crops which weighed on grain and soy prices on Monday.
“Weather models suggest warmer and drier weather after May 1, so I think everyone thinks there will be an improvement in plantings beginning next week,” said Mike Zuzolo, analyst for Global Commodity Analytics.
Rainy, chilly weather in the U.S. Midwest this week will further slow corn plantings while adding valuable soil moisture to drought-stricken regions, an agricultural meteorologist said on Monday.
“It will continue cold and wet, with 0.3 inch up to an inch (0.8 to 2.5 cm) of rain beginning late Monday and continuing into Wednesday in the Plains and in the Midwest with nearly 100 per cent coverage,” said John Dee, meteorologist for Global Weather Monitoring.
“It will be warmer, with not as much precipitation next week, so there will be some improvement for fieldwork,” Dee said.
The turn to excessively wet weather has caused U.S. farmers to fall behind their average pace for planting the corn crop. There is still plenty of time to plant and realize satisfactory yields, but producers are growing nervous with each passing day.
“Beyond next week into mid-May it looks a lot better. There’s a two-week window when they should get a lot of planting done,” said Art Liming, market strategist for Citigroup.
The U.S. Department of Agriculture said on April 15 that two per cent of the U.S. corn crop had been planted, below last year’s 16 per cent seeding pace at this point and below the seven per cent five-year average.
USDA will release a new weekly planting progress report late Monday, but it is likely to show little progress last week due to the persistent rainfall and flooding.
A Reuters poll of 17 analysts indicated farmers edged forward in planting corn last week yet only six per cent of the crop likely was sown as of Sunday. The estimates ranged from four per cent to nine per cent.
“We’re going to see another ugly planting report this afternoon,” Matt Zeller, director of research at INTL FCStone, said in a note to clients.
“Also, I think China’s report of lower-than-expected imports in March got the ball rolling downhill overnight,” Zuzolo said, referring to the lower wheat, corn and soybean futures prices.
The General Administration of Customs of China on Monday reported China’s wheat imports in March were 46 per cent below a year ago, corn was down 50 per cent and soybeans were down 20 per cent.
For the year, wheat imports were down 38 per cent, corn was down 41 per cent and soybean imports were down 13 per cent.
— Sam Nelson reports on the CBOT grain and soy futures markets for Reuters from Chicago. Additional reporting for Reuters by Mark Weinraub in Chicago, Sybille de La Hamaide in Paris and Mayank Bhardwaj in New Delhi.
