Afternoon Recap by Bob Burgdorfer

Corn closes lower as rain should end next week

Published on: Apr 24, 2014

April 24, 2014

Corn futures closed lower on Thursday in moderate trading as an extended dry spell next week should allow spring planting to advance.

Soybeans closed higher for the first time in a week as recovered some of what they lost in recent days. Bullish soymeal exports likely gave the market some support.

Winter wheat futures finished higher as the U.S. Drought Monitor on Thursday showed drought intensified in parts of the Plains.

Corn closed lower after prices traded both sides of unchanged and within an 8-cent range.

Weekly exports were as expected but the market remains focused on spring planting. Rain was forecast through the weekend in the Midwest, but dry weather after that should allow planting to resume.

USDA reported old-crop corn export sales of 24.4 million bushels in the latest week, up 15% from the previous week.

"Showers will continue to scatter across the Corn Belt into Friday, bring patchy totals of mostly .25 to 1" to at least 1/2 of the belt. However, the most extensive rain occurs from Sunday to Thursday next week, particularly Monday/Tuesday. Amounts of 1 to 3 inches will be fairly common, with locally heavier totals," Commodity Weather Group said on Thursday.

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

Chicago May corn closed down  2-1/4 cents at $5.01-1/4- and new-crop December down 1-3/4 at $5.02-3/4.

What to Look For – Troubles in the Ukraine appear to be escalating again, with Russia conducting military exercises near the border as Ukraine cracks down on pro-Russian separatists.

May soybeans closed higher for the first time in a week. Traders may be awaiting fresh news on imports and Chinese cancellations. Soybeans were pushed lower in recent days by talk of imports from South America and China cancelling purchases.

Weekly soybean exports released on Thursday were down sharply from the previous week, but that had been expected as global buyers turn to South America. That USDA weekly sales report included a cancellation of 55,500 tonnes by China.

Asian sources told Reuters 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 for much of Argentina and Brazil this week, according to Commodity Weather Group.

In Chicago, May soybeans closed up 3-1/2 cents at $14.72 and November closed up 3-1/2 at $12.31.

What to Look For – USDA will add soybean planting percentages in next Monday's weekly crop progress report. 

Winter wheat futures closed at their highest in nearly a week as drought expanded in the central and southern Plains last week. The National Drought Monitor on Thursday said drought conditions increased in Texas, western Oklahoma and Kansas.

There have been scattered showers in the hard red winter wheat areas of the U.S. Plains but the crop needs more.

More than half of the Texas and Oklahoma wheat was rated poor to very poor. In Texas, the area of exceptional drought increased to 12.5% in the latest week from 10.3%, while 48.5% of the state had severe to exceptional drought, up more than 4% in a week, according to the Drought Monitor.

Drought was largely absent in the Midwest, where much of the soft red winter wheat is grown.

Heightened tensions between Russia and Ukraine added support to wheat as the strife could affect the production and marketing of grain in that region

SRW May wheat closed up 12-1/2 cents at $6.89 and July finished up 13-3/4 at $6.96-1/2. HRW May wheat closed up 13-3/4 cents at $7.59-1/2 and July up 15 at $7.65-1/2.

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

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