April 5th, 2007 filed by Christine Stebbins

The name of the game in Chicago Board of Trade grain and oilseed markets this week was volatility. Corn, soybeans and wheat saw wide price swings, continuing to react to last week’s government report forecast of the highest U.S. corn plantings in 60 years. But a forecast is one thing, reality is another, traders calculated this week.
Farmers need to see a drastic improvement in cold rainy Corn Belt weather to get all those intended corn acres planted in this spring. Iowa and Illinois alone account for a third of all U.S. corn and soybeans, and both saw sub-freezing temps far below normal for fieldwork, let alone putting seed in the ground.
That reality check should keep market volatility high and lead to some dramatic price swings in the weeks ahead. If they had a choice between planting corn vs. soybeans, farmers would still turn to corn hands-down due to its profitability. But as a rule of thumb, farmers who haven’t planted corn by mid-May lose about a bushel and acre on yield for evert day thereafter of delay. Beans can go in the soil in June or even later.
So weather reports will have a rising daily impact on price direction — a trend that will only heighten as the growing season progresses. So far, forecasters are calling for unseasonably cold weather in the Midwest through the Easter weekend then rain is supposed to move back into the region again next week. Both are bad for planting, keeping traders edgy.
“It’s a weather market in April — its a little early to be trading weather, but it is cold,” one CBOT trader said late Thursday.
There were also worries about cold weather damaging the soft red winter and hard red winter wheat crops, both now coming out of winter dormancy and trying to kick start the normal spring growth spurt for early summer harvest. The return of wintry cold helped wheat rally on Thursday ahead of the three-day weekend. The markets are closed on Good Friday.
The weekend weather and Monday’s forecasts will likely be the driver in CBOT markets on Sunday night and Monday morning.

Other than weather there’s little to get traders excited.

–The Commodity Futures Trading Commission will release its weekly trade data on Friday afternoon. Traders expecting commodity funds to cut their longs in CBOT corn futures/options and increasing their shorts in wheat after the recent dive in prices. The soy complex is hard call as the net position could be close to unchanged.
–USDA issues its monthly supply-and-demand report on Tuesday. Traders aren’t expecting many changes, if anything wheat stocks could shrink and corn stocks grow a little to reflect more wheat being fed to livestock. High corn prices during the first quarter of 2007 was encouraging livestock producers to cut back on feeding corn.