Weather, planting to stay in grains spotlight
There’s nothing like perceived changes in the weather to stir a little buying interest in corn.
Even though the week ended May 4 was pretty clear in the Corn Belt for planting corn, calls for rain next week sent shivers through the market — sparking fresh buying.
To assure maturity before the autumn frost, Midwest farmers try to get all their corn planted by May 15. This year’s seedings are projected as the most in 60 years, fed by the rampage toward biofuels like corn-based ethanol.
Cold, rainy weather has kept farmers in the Midwest far behind on corn, however. Even with clear weather and 32-row planters, farmers still lag.
CBOT floor traders on Friday said they expect only 50 percent of the corn crop will be planted by the weekend, down from the usual 64 percent for the first week in May. The government will provide its weekly number on Monday afternoon.
Fewer corn acres usually means more soybeans, which are planted after corn with a shorter growing season. So, as one would expect, the corn scenario fed CBOT soybean sales.
It bears repeating: the weather is pretty much the only factor CBOT traders are looking at until mid-May. So if corn prices spike around midday, it will tell you that updated weather outlooks are still wet for the Midwest.
“There are still fears that if we don’t plant the corn, then we’ll plant more beans. We’re in that time of year when we’re trying to sort out a big issue — and that’s acres,” said Don Roose, president of Iowa brokerage U.S. Commodities.
The wheat market took a big hit this week as this year’s winter wheat crop seemed to jump out of its coffin.
Scouts on their annual field inspections of Kansas, the top wheat state, said that overall this year’s crop looked better than expected despite a hard spring freeze. They projected a bigger crop than last year’s annual tour.
Traders on Friday will be watching for the government’s first first crop projection for 2007 U.S. winter wheat. So far, analysts expect gains — about 300 million bushels more than last year’s crop.
An interesting detail to watch will be what effect all the rain in the central and southern Plains may have on the hard red winter wheat grown there. Warm, wet weather raises the risk of fungal diseases that can potentially ruin quality.
–Commodity Futures Trading Commission commitments of traders data on May 4 showed that funds remained net short in CBOT wheat futures but expanded their longs in corn, soybeans, soyoil and soymeal. All that was as expected. Some said the corn fund long might be a little bigger than expected. If weekend weather forecasts for next week get drier, that fund long could add corn selling pressure on electronic screens on Sunday night or in the pit on Monday morning.