March 30, 2010

US corn and soy futures rise; traders await on USDA for direction

US corn and soy futures surged on Monday (Mar 29); but many traders are depending on USDA's Wednesday report, which will release this spring's estimates of corn and soy acreage, for clearer direction.

Investors expect the report to signal prospects of back-to-back seasons of mammoth crops from the world's top grower and exporter of corn and soy, and provide key trading signals not only to the Chicago Board of Trade (CBOT) but grain markets across the globe.

Soy rose for a second session as a labour dispute at a key grains port in Argentina threatened to disrupt supplies from one of the world's biggest soyoil and soymeal exporter.

The average estimate for US soy plantings among analysts ahead of the USDA's March 31 report was 78.5 million acres, up from 77.5 million in 2009. Analysts expected an increase in 2010 corn acreage as well, while wheat acreage was poised to decline.

CBOT corn for May delivery rose 0.28% to US$3.57 a bushel by 1250 GMT while May wheat gained 0.75% to US$4.66-1/4 per bushel. Soy for May delivery rose 0.74% to US$9.58 a bushel.

The weather will turn warm and dry this week in the Midwest, easing recent concerns that wet winter weather could cross over into spring and delay seedings.

A weak dollar makes US commodities attractive as a hedge against inflation, making it a bullish factor for grain futures.