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U.S. grains: Soy, corn firm on weather worries, bargain buying

planting corn
A farmer plants corn near Ashland, Ill., northwest of Springfield, on April 14, 2016. (Photo: DMathies/iStock/Getty Images)

Chicago | Reuters — U.S. soybean and corn futures rose Tuesday on bargain hunting following Monday’s sharp declines, and worries about wet forecasts slowing planting in portions of the northern Midwest, analysts said.

U.S. wheat futures finished mixed, with Chicago Board of Trade soft red winter wheat futures rising while K.C. hard red winter wheat futures eased.

CBOT July soybeans settled up 8-3/4 cents at $10.20-1/4 per bushel and July corn ended up 2-1/2 cents at $4.03-1/4 a bushel (all figures US$). CBOT July wheat rose three cents at $5.14-1/2 a bushel while K.C. July wheat ended down 1-1/4 cents at $5.38-1/4.

Soybeans firmed a day after the July contract fell to $10.10-3/4, a one-month low, while July corn bounced after dipping below the $4 mark for the first time in a week.

Planting weather remained a key issue. The U.S. Department of Agriculture late Monday said that the U.S. soybean crop was 15 per cent seeded, ahead of the five-year average of 14 per cent. The corn crop was 39 per cent planted, behind the
five-year average of 44 per cent.

However, progress lagged in key northern states such as Minnesota and North Dakota, and weather forecasts called for rains in that region this week that should stall field work.

“The models were a little wetter up north, where they are furthest behind. That’s an important area, with a lot of acres,” said Jim Gerlach, president of Indiana-based A/C Trading.

In Argentina, heavy rains have complicated the harvest of a soybean crop that has already been slashed by drought.

Also, traders were adjusting positions ahead of USDA’s monthly supply/demand report on Thursday, which will include the government’s first official forecasts for the 2018-19 crop year.

“Thursday’s report is going to highlight the fact that corn stocks, both in the U.S. and globally, are going to fall quite dramatically this year,” Gerlach said.

The average forecast of U.S. 2018-19 corn ending stocks among analysts surveyed by Reuters was 1.628 billion bushels, compared with USDA’s latest projection of 2.182 billion bushels at the end of 2017-18.

Wheat futures firmed on technical buying and short-covering, with the CBOT July contract turning higher after falling to a one-week low of $5.06-1/4.

Commodity funds hold a net short position in CBOT wheat, leaving the market prone to bouts of short-covering.

USDA late Monday rated 34 per cent of the U.S. winter wheat crop in good-to-excellent condition, up from 33 per cent last week.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Michael Hogan in Hapmburg and Naveen Thukral in Singapore.

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