Afternoon Recap by Bob Burgdorfer

Corn higher on strong cash markets, wet forecasts for Midwest

Published on: Apr 23, 2014

April 23, 2014

Corn futures rose Wednesday on stronger cash prices as farmers slowed sales to focus on planting before more rain arrives in the Midwest.

New-crop soybean contracts rose on spreading as old-crop months were pressured by reports that Brazilian soybeans that were once destined for China are being diverted to the United States.

Winter wheat futures finished higher as the hard red winter wheat crop remained in dire condition amid a lack of rain.

Corn closed higher as the slowing of cash sales pushed up basis bids in domestic and export markets.

Spring planting may be interrupted again as forecasts call for above-normal moisture in the much of the Midwest into next week.

"A more substantial system leads to more notable corn seeding delays Sunday through Wednesday of next week. Amounts are likely to range .75" to 2.5", with locally heavier totals of up to 4" possible in northeast Iowa, northern Missouri, Illinois, Indiana, Ohio and the Tennessee Valley," Commodity Weather Group reported Wednesday.

U.S. corn planting is already behind the average, with 6% completed as of Sunday, well behind the 14% average.

The old-crop May contract and the new-crop December both posted one-week highs and advanced beyond their 200-day moving averages of $4.90-1/2 and $4.93-5/8, respectively.

Chicago May corn closed up 7-1/4 cents at $5.03-1/2 and new-crop December up 8-3/4 at $5.04-1/2.

What to Look For – Any changes in weather forecasts.

Soybeans closed at their lowest in seven sessions in old-crop months on pressure from reports of incoming soybeans from Brazil and soymeal from Argentina.

New-crop November finished higher to put the old-crop/new-crop spread at its narrowest since late March.

The diverting of Brazilian shipments to the United States has made traders wary that China may cancel more purchases. Asian sources said last week that Chinese buyers may default on 1.2 million tonnes of U.S. and South American soybeans.

The South American harvests are progressing as forecasts suggest clear weather in much of Argentina and Brazil this week, according to Commodity Weather Group.

In Chicago, May soybeans closed down 11-1/4 cents at $14.68-1/2 while November closed up 12 at $12.27-1/2.

What to Look For – Incoming soybeans and soymeal from South America. Imports have been expected because of tight supplies here and harvesting under way in Argentina and Brazil. 

Winter wheat futures posted modest gains for a second day as they continued to recover from the big losses on Monday. Despite recent beneficial rain the hard red winter wheat remains in dire shape making it hard to push futures lower.

Midday forecasts by Commodity Weather Group were mostly dry for the western Plains this week and for nearly all of the hard red winter wheat areas in the 6- to 10-day forecast.

Winter wheat condition ratings in Monday's weekly crop progress report were little changed from the prior week. As of Sunday, 34% was rated good to excellent, 33% fair, 20% poor and 13% very poor. Annual crop tours will be under way next week and scouts will look for signs of freeze damage and the extent of drought damage.

SRW May wheat closed up 3-1/2 cents at $6.76-1/2 and July finished up 3-1/4 at $6.82-3/4. HRW May wheat closed up 4-1/2 cents at $7.45-3/4 and July up 3-3/4 at $7.50-1/2.

What to Look For – Forecasts favor dry conditions in the Plains through next week.

Afternoon Recap by Bob Burgdorfer

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