Markets

GRAIN MARKETS: Kansas snowstorm powers wheat markets

Corn and soybeans rise as wet fields sideline planters.

Winter wheat markets charged higher on Monday, with hard red winter (HRW) wheat near a six-week high after a storm buried a number of Kansas fields under a foot or more of snow on Sunday. In addition, freezing temperatures may have hurt headed wheat that was not covered by the snow.

Soft red winter (SRW) wheat in the Midwest had its own problems with excess rain and flooding over the weekend.

Corn and soybean futures had good gains helped by the winter wheat but also by reports that some fields in Illinois may have to be replanted after plentiful rain and flooding.

Wall Street was a little higher when the crops closed, as Congress appears to have a budget agreement to keep the government running after this week.

Export highlights (U.S. Department of Agriculture and Reuters):

- Weekly export inspections largely matched trade forecasts. Mln bu (previous week): corn 43.1 (57.7), soybeans 19.1 (23.8), wheat 21.1 (23.2).

- The Philippines seek to buy 55,000 metric tons of optional-origin feed wheat. The tender deadline is May 2 and shipment is for July.

- Iraq seeks to buy 50,000 metric tons of wheat from the U.S., Canada or Australia. The tender closes May 7.

Corn futures received a boost from the higher wheat market to close at a two-week high, with some additional help from slow planting in the Midwest where rain has made fields soggy.

USDA will update planting progress later today and some trade estimates expect about 31% done versus 17% a week ago. The five-year average a year ago was 30%.

CME said 936 contracts were posted on Monday to bring the total to 2,036 contracts. Big funds entered the week bearish on corn futures with the Commodity Futures Trading Commission (CFTC) reporting they added 44,238 to their net short position during the week ended April 25.

After the markets closed, USDA said 460.4 million bushels of corn went to make fuel ethanol in March, up from 438.4 million a year ago but down from Farm Futures’ forecast of 469 million.

The Chicago Board of Trade's (CBOT) estimated volume for Monday was 506,236. Friday’s actual volume was 353,109. Open interest in Friday’s lower market decreased by 3,995 with May’s down 13,984 and July’s up 5,538.

May corn closed up 11-1/4 at $3.69-1/4 and July rose 11 to $3.77-1/2. New-crop December rose 9-1/2 to $3.94-1/2.

What to Look For: Attention remains on the weather and how much planting can be done. May 15 looms large in many farmers’ minds as planting after that can affect yields, particularly in the northern areas of the western Corn Belt.

Soybeans peaked at a four-week high before easing to settle at a one-week high, supported by the higher wheat markets and planting delays in the Midwest.

After the close, USDA said 160 million bushels of soybeans were crushed in March compared with 151 million in February and 166 million a year ago. Farm Futures expected 162.7 million.

The CBOT estimated Monday’s volume at 148,451. Friday’s actual volume was 131,852. Friday’s open interest decreased by 5,634 in the flat market with May’s down 5,712 and July’s down 843. November’s open interest increased by 27.

May soybeans closed up 13-3/4 at $9.59 per bushel and July up 14 at $9.70-1/4. New-crop November rose 11-1/4 at $9.64-1/2.

What to Look For – Weather remains the top story amid concerns about planting delays. Also, the May 7 French vote looms large and, depending on the results, could send tremors through a number of markets including commodities.

Winter wheat markets sped higher following the snow and cold in Kansas and Oklahoma. Crop damage is still being assessed but some crop sources said losses are to be expected particularly in fields where stalks of headed wheat were broken.

A week ago, USDA said 25% of the wheat in Kansas was headed, 65% in Oklahoma and 67% in Texas. Those figures will be updated later on Monday.

More deliveries came out on Monday against May futures. In Chicago, 453 SRW lots were put out for a total of 900. In Kansas 576 HRW contracts were posted for a total of 976.

CBOT estimated Monday’s volume at 208,813. Friday’s actual volume was 98,640. Friday’s open interest decreased by 4,755 in the higher market with May’s down 2,153 and July’s down 4,526.

Chicago’s May soft red winter wheat closed up 24-1/4 at $4.42-3/4 and July up 23-3/4 at $4.56. Kansas City’s May hard red winter wheat rose 28 at $4.52-3/4 and July up 28-1/2 at $4.65-3/4. Spring wheat for May rose 9 to $5.49-3/4 and July rose 8 to $5.62-3/4.

What to Look For – Traders will be scouring crop reports later today to learn the extent of freeze and snow damage was sustained by the winter wheat.

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