April 13th, 2007 filed by Christine Stebbins

Chicago Board of Trade grain and oilseed markets reacted to weather conditions in another volatile week. The jitters started with the opening bell on Monday after a weekend freeze clamped down on the U.S. winter wheat crop. Analysts and traders batted around ideas that 100 million to 200 million bushels of U.S. winter wheat could have been lost. But by week’s end wheat specialists were still assessing the damage.
Corn was also driven higher by delayed Midwest planting due to the cold, wet spring. Muddy, cold soils have a lot of drying out and warming up to do before even basic fieldwork in Illinois and Iowa, which together produce a third of U.S. corn and soybeans.
If U.S. farmers plant less corn than forecast and spoiled wheat acres are plowed under to seed other crops this spring, the result will undoubtedly be more soybean acres. That factor overhung soybean prices all week.
Given Friday’s weather forecasts, there’s no reason to believe the market won’t see more of the same in the week ahead. Price action will depend on the latest forecast.
How much will traders be watching the weather this season? Fabled Chicago meteorologist Tom Skilling — who many Chicago traders swear by — has decided to add an additional weather broadcast on WGN television news starting Monday at 5:55 p.m. Chicago time (2355 GMT) — just before the CBOT agricultural markets open for electronic trading at 6:30 p.m. (0030 GMT)
Another pointer next week will be the U.S. Agricultural Department’s crop progress report on Monday afternoon at 3:00 p.m. (2100 GMT).
Traders are expecting the government to report that the condition of the wheat crop as fallen by 5 to 10 percentage points from its 64 percent in good-to-excellent rating the week before. Corn plantings are also expected to lag, with only 5 to 7 percent of the crop seeded compared to an average of 10-11 percent by mid-April.
The heart of the Corn Belt is soggy and cold. Soil temperatures need to be 50 to 55 degrees Fahrenheit for corn to germinate. So far, the ground is only warm enough to germinate corn in Missouri and next week’s cool weather will not be raising soil temperatures much, said forecaster Mike Palmerino with DTN Meteorlogix this week.
Bottom line: “It’s the weather,” said analyst Mario Balletto with Citigroup. So stay tuned.

–Friday’s weekly trade data from the Commodity Futures Trading Commission showed that managed funds expanded their net long positions in corn and soybean oil but cut their longs in soybeans and soymeal in the week ended April 10. Funds also cut their net short wheat position. Most of the numbers were close to what traders expected. The exception was soybeans which showed a bigger reduction in longs than expected.

–The National Oilseed Processors Association will release its monthly crush data on Monday.

(Photo: U.S. Department of Agriculture)