Grains Rally Overnight on Wet Weather Outlook
Apr 29, 2013
Corn was up 10 cents a bushel on the overnight session as wet weather continues to plague corn planting. Soybeans found modest support posting a 2-cent gain while wheat was up 6 cents a bushel.
In corn, planting delays are starting to get the attention of the market as last week’s slow pace of only 4% planted combined with a wet and cold weather outlook for this put added pressure on getting the crop planted in a timely fashion. Weather models show a prolonged major rain event is likely to affect most of the Midwest, as well as the eastern portions of the central Plains over the next several days, with coverage around 75% over these areas and the rainfall amounts range from 1-4 inches. USDA’s planting progress report this afternoon is likely to show limited sowings of 8 to 10%.
In wheat, the Wheat Quality tour begins this week which should provide key information on the state of the hard red winter wheat crop in Kansas and parts of Oklahoma. Early season drought along with severe cold snaps in the past month has likely put the crop below par but the extent of the damage remains unclear. Over the weekend, Egypt announced that they may reach 70% self-sufficiency in wheat production this year because of an expected boost in the local harvest. Egypt usually imports around 10 MMT of wheat a year but this year the state says it will buy only around 4 to 5 MMT from abroad, hoping to get the rest from local production.
For soybeans, near-term demand from domestic soybean crushers has helped keep nearby prices moving higher. Last week, crushing plants saw an average 4-cent gain in basis while the rest of the soybean buyers posted a 3-cent loss on average. However, new-crop beans may see more pressure as corn planting delays could signal more soybean acres as farmers switch from corn to beans.