Apr 27, 2011

 

US grain and soy futures decrease

 

 

US grain and soy futures fall behind on Tuesday (Apr 26) because traders booked earnings after recent massive increases.

 

Soft red winter wheat dropped 1.7%, 14 1/4 cents, to US$8.47 a bushel, while soy slumped 0.5%, or 7 1/4 cents, to US$13.89 1/4 cents a bushel. The July contract is the most active for each market at the CBOT.

 

Corn futures were mixed, with the July contract edging up 0.6%, or 4 1/4 cents, to US$7.72 3/4 a bushel. Corn for December delivery, which represents the crop that is being planted this spring for harvest next fall, fell 0.8%, or 5 3/4 cents, to US$6.75 3/4 a bushel.

 

Prices retreated even though the USDA, in a weekly report issued late Monday (Apr 25), confirmed poor weather had hurt the condition of the winter wheat crop and delayed plantings of spring wheat and corn. Market participants wanted to take money off the table after prices climbed before the report was released Monday (Apr 25), analysts said.

 

"Even though the news was kind of bullish overnight, you do not go up every day," said a broker in Chicago.

 

Grain and soy futures have rallied recently on concerns about poor weather hurting production, with corn and wheat leading the charge. Corn reached a record high earlier this month as demand remained strong in the face of high prices.

 

Grain traders are paying particularly close attention to the weather this year because farmers need to produce a large corn crop to rebuild supplies, which are projected to drop to a 15-year low before the next harvest starts this fall. Cool, wet weather has delayed planting so far.
 

Traders are assessing weather threats to wheat after harsh weather, including a historic drought in Russia, slashed global output last year. Forecasts show dry weather will continue to stress hard red winter wheat in the southern US Plains and precipitation will slow planting of spring wheat in the northern Plains.

 

"It still looks pretty bad," Scoville said about the weather for crops.

 

Soy, which will not be planted until later this spring, felt pressure from worries about declining demand from China, the world's top importer of the oilseed. Concerns China may continue its pattern of monetary tightening to fight inflation weighed broadly on the grain markets, analysts noted.

 

July soymeal declined 0.4% at US$364.40 per short tonne, while July soyoil decreased 0.3% to 58.62 cents a pound.

 

At the Kansas City Board of Trade, hard red winter wheat for July delivery lost 1.1% to US$9.60 3/4 a bushel. Hard red spring wheat for July delivery closed down 0.8% at US$9.81 1/2 a bushel at the MGEX in Minneapolis.