Corn futures fell from a four-week high on speculation that U.S. farmers boosted sales of grain harvested in 2012 and that drier weather will help ease planting delays for this year’s crop. Soybeans also dropped, while wheat rose.
Average cash-corn prices jumped 6.2 percent yesterday after rain limited planting to the slowest pace since 1984, government data show. Greg Grow, the director of agribusiness for Archer Financial Services Inc., said some clients sold the grain after the rally. Warm, dry weather in the western Midwest in the next two days, and dry weather from Kentucky to Michigan through May 4, will firm soils for planting equipment before rain returns, Bethesda, Maryland-based Commodity Weather Group LLC predicted inn a report.
“There was an increase in corn sales after yesterday’s rally,” Grow said in a telephone interview from Chicago. “The forecast is not perfect for widespread planting progress, but there will be scattered windows of opportunities for farmers to get in their fields.”
Corn futures for delivery in July fell 1.5 percent to close at $6.50 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $6.69, the highest since April 1. The grain fell 6.5 percent in April, the third consecutive monthly decline.
Prices also dropped on speculation that U.S. supplies will be ample, even after a slow start to spring planting. Yesterday, the U.S. Department of Agriculture said only 5 percent of crops had been sown in the nation’s main producing states, trailing the five-year average of 31 percent. The U.S. is the world’s biggest corn exporter.
The USDA said in February that corn production may rise 35 percent to a record 14.53 billion bushels. The agency will update its supply and demand forecasts on May 10.
Delayed planting “is not enough to compensate for the longer-term outlook of rising production and lackluster demand,” Credit Suisse Group AG analysts including Tobias Merath in Zurich wrote today in an e-mailed report.
Soybean futures for delivery in July slid 0.7 percent to $13.99 a bushel on the CBOT. The price dropped 0.4 percent in April, the third straight monthly decline.
Wheat futures for delivery in July rose 2 percent to $7.31 a bushel in Chicago, capping a 6.3 percent gain in April.
The grain rose 5.6 percent over the past two days on concern that unusually low temperatures forecast tomorrow from Nebraska to Texas will damage wheat already under stress from cold, dry weather since farmers planted seeds last October, Randy Mittelstaedt, the director of research for R.J. O’Brien & Associates in Chicago, said in a telephone interview.
Production of hard, red winter wheat, the variety used to make bread and flour, may fall 24 percent to 766 million bushels from 1.004 billion a year earlier, Mittelstaedt said. That would be the lowest since 2006, when U.S. farmers harvested 682 million.