April 1, 2009

       
Corn prices may rise in the next few days as wetter-than-expected weather could slow U.S. sowing.

The U.S. is the world's biggest corn producer and exporter.

According to U.S.-based commodities brokerage Alaron's analyst Tim Hannagan, there's a "high probability" of some weather premium in corn at least until April 15, as the weather website wxrisk.com is forecasting wetter-than-normal weather.

 

At 0625 GMT, Chicago Board of Trade corn contract is trading at US$4 a bushel, down 4 3/4 cents from the close, after rising 18 1/2 cents in pit trade Tuesday on support from soybeans, crude oil and end-of-month position squaring.

 

There's also still uncertainty in the U.S. about whether farmers will plant more corn or soybeans, since these crops are more or less interchangeable, according to a recent report by the International Grains Council.

 

It said the higher price of soybeans over the past month due to drought in Argentina and Brazil and wetter weather in the U.S. could still prompt farmers to shift more acreage to soybeans.

 

CBOT May soybeans ended Tuesday 47 1/2 cents higher at US$9.52 a bushel, after the U.S. Department of Agriculture projected U.S. 2009-10 planted acreage below analysts' expectations.

 

The USDA also said overnight in its weekly Thai rice report that export prices fell 5%-9% in the week to Tuesday, particularly for low-grade white rice and parboiled rice, due to reduced foreign demand.

 

It said that most export enquiries were limited to small contracts for broken white and fragrant rice from African buyers.

 

Thai rice prices are also being pushed down by market talk about the Thai government is planning to sell some of its old-crop rice stocks in mid-April.

 

However, the Thai government's paddy procurement for the new crop currently being harvested has reached 251,327 metric tonnes, according to the USDA Thai rice report.

 

The USDA said the Thai government won't face much problem in procuring its target of 2.5 million tonnes of paddy from the new crop, as intervention prices are 20%-30% more than open market prices.

 

CBOT May rice ended up 39 1/2 cents at US$12.41 per hundredweight Tuesday, on gains in other grains and after the USDA reported a drop in stocks versus a year earlier.