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GRAIN MARKETS: Wet forecasts lift corn, soybeans

Winter wheat unable to hold early gains.

Corn and soybean futures closed a few cents higher as forecasts keep cool, wet weather in the Midwest this week, which should slow planting and possibly prompt replanting of corn in some parts of Illinois.

Winter wheat was higher most of the session but slipped late to close a little lower. Wet conditions in the Plains and Midwest may harm the mature wheat, which need dry, warm conditions.

The 6- to 10-day outlook (May 27-31) is wet for the Midwest and Plains, with seasonal temperatures expected then in the Midwest and cooler-than-normal ones for the Plains. 

Exports – USDA, Reuters:

- Weekly export inspections mln bu (est, prev wk): corn 45.1 (33-49, 55.9), soybeans 12.8 (9-14, 10.5) and wheat 24.8 (15-25, 25.5).

- Saudi Arabia bought 1.5 million tonnes of optional-origin feed barley. The barley is for arrival July to August.

 - Jordan seeks100,000 tonnes of optional-origin feed barley. The tender concludes May 24 and shipment is for October-November shipment.

- Jordan posted a tender to buy 100,000 metric tons of optional-origin milling wheat after not buying wheat in an earlier tender. The new tender closes May 23. No shipment was listed, but shipment in its previous tender was October-November.

Corn futures closed a few cents higher and at their highest in more than two weeks as the rain this week may delay the finish of Midwest planting.

USDA estimates later today are expected to show corn about 85% planted versus 71% last week. Traders will be inspecting crop reports to determine how many, if any, of the fields in central and southern Illinois will have to be replanted or switched to soybeans.

The lower dollar helped the market. The greenback is the lowest since November 9.

The CBOT estimated Monday’s corn volume at 261,991. Friday’s actual volume was 363,031. Open interest in Friday’s lower market decreased by 12,533 with July’s down 16,100 and December’s up 371.

July corn closed up 2-1/2 cents at $3.75 and new-crop December rose 2-1/2 to $3.92-3/4.

What to Look For: Talk continues that replanting is needed in Illinois. Crop insurance allows replanting into early June, but there may be the risk of lower yields. Forecast calls for showers early this week.

Soybeans closed higher for the second day, helped by fund buying, but remain below key moving averages.

Wet weather the next few days may slow planting. Analysts, on average, expect 52% of the crop to be planted as of Sunday, versus last year’s 52% five-year average.

The investigation of Brazil’s leader continues, but the Real has stabilized after last week’s big crop. The lower Real had Brazilian farmers selling their soybeans this week, which are priced in dollars.

The CBOT estimated Monday’s volume at 127,244. Friday’s actual volume was 166,962. Friday’s open interest in the higher market increased by 7,936 with July’s up 4,564 and November’s increased by 359.

July soybeans closed up 3-1/2 at $9.56-1/2 and August up 4 at $9.58-1/4. New-crop November rose 4-1/2 to $9.56-1/4.

What to Look For – Wet weather in the Midwest and the political investigations in Brazil and Washington continue to be watched.   

Winter wheat markets finished a little lower on fund selling after holding modest gains early.

Friday’s CFTC report showed funds turned net short in hard red winter wheat after turning net long the prior week.

The weather remains troublesome for winter wheat, with more rain forecast this week for the Plains and the Midwest. Much of the wheat has headed and needs dry weather.

Spring wheat finished a few cents higher. Rain moves through the northern Plains the next few days where spring wheat should be about 90% planted as of Sunday.

CBOT estimated Monday’s SRW wheat volume at 95,465. Friday’s actual volume was 74,290. Open interest in Friday’s higher market decreased by 746 with July’s down 2,917 and September’s up 918.

Chicago’s July SRW wheat closed down 1 at $4.34-1/4 and September down ½ at $4.48. Kansas City’s July hard red winter wheat slipped 2 to $4.36 and September slipped 2 to $4.53. Spring wheat for July rose 3-1/2 to $5.59-1/4 and September rose 3 to $5.65-1/2.

What to Look For – Much of the wheat in this week’s storm areas has headed with harvest about a month away. The trade expects a mild drop in USDA’s condition rating to about 50% good/excellent.

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