CHICAGO: US soybean futures rebounded to near a four-year peak o n M onday, notching gains for the fifth straight day after an earlier retreat as traders booked profits and the market fell on larger-than-expected deliveries on first notice day.
Persistent sales of US soybeans to China, the world's largest buyer of soy, kept a firm foundation under the soy complex with the US Department of Agriculture (USDA) confirming trader rumors that China had bought another 220,000 tonnes of US soybeans for delivery in the new-crop marketing year (2012/13)
Corn closed higher on dwindling stocks of corn, big export sales of US corn, including sales to China, and no deliveries on the spot May corn futures contract. Monday was first notice day for deliveries on the CBOT agricultural futures contracts. The absence of deliveries is a good indicator of strong demand for the physical product by feeders, ethanol makers and exporters.
Wheat turned up on concerns about dry weather in southern Russia and southern Ukraine winter wheat growing areas and excessive wet weather, including flooding in parts of the US Plains hard red winter wheat growing region.
CBOT May soybeans closed up 6-1/4 cents at $15.03, May corn was up 7-1/4 at $6.60-1/4 and May wheat was up 5-1/2 at $6.47-3/4.
Gains in soybeans were slowed by larger-than-expected deliveries of 752 contracts against the May contract on first notice day. Traders had expected there would not be any deliveries because of tight supplies.
Demand for soybeans remains strong, analysts said. China will likely keep buying because margins for crushing soybeans remain good, said Jerry Gidel, analyst for Rice Dairy LLC.
CORN TOUCHES 3-WEEK HIGH
Corn edged up to a three-week high, bumping against chart resistance at the 200-day moving average (May $6.61-3/4) building on a surge of 5 percent on Friday that was fueled by the largest one-day sale of US corn since 1991. Traders said most of the corn was likely headed for China.
Tension in corn and soybeans has been concentrated in old-crop contracts, which have established a sizable premium over new-crop prices given tight short-term stocks.
Analysts say forward prices may benefit from Chinese demand for next season and the need to replenish stocks and ensure farmers plant more crops.
The bulk of the massive one-day corn purchase reported Friday was for grain to be harvested next autumn, when US farmers were expected to reap a record-large crop.
"We are... growing incrementally more bullish on new-crop (corn) prices from current levels, as the early harvest and new-crop feeding required to save the old-crop carryout, will likely pressure new-crop supplies," Morgan Stanley analysts said.
Farmers are expected to start harvesting corn earlier than usual because they started planting early due to favorable weather.
US CROPS IN FOCUS
Traders were waiting for an update on corn planting in the United States, with the USDA set to issue a weekly crop progress report on Monday afternoon.
US farmers had planted 43 percent of their corn and 13 percent of their soybeans as of April 29, with rain and cold temperatures limiting their progress around the Midwest, according to a Reuters poll of 18 analysts. The slowdown was a switch after warm, dry weather allowed farmers to start planting at a rapid pace in March.
Traders also were keeping an eye on the US wheat crop. Heavy rains over the weekend in key growing areas of the US Plains may have damaged some of the new wheat crop, leaving growers to hope for sunshine to help the crop dry out.
In Kansas, typically the top US winter wheat producing state, reports put rainfall at more than 2 to nearly 7 inches (5-18 cm) in a 24 hour period over the weekend through the southeast and south-central part of the state, said National Weather Service meteorologist Jennifer Bowen.
Excessive rainfall on mature wheat can cause it to bend, to 'lay down' in a field, making it difficult to dry out and to harvest, eroding yields. Excessive rain can also foster disease.
Employees of food companies, grocers, trading firms, the government and the media will get a firsthand look at the Kansas crop as an annual wheat tour kicks off on Tuesday.
A record-large group of 100 attendees will take part in the Hard Wheat Quality Tour, sponsored by the Wheat Quality Council, up from about 70 last year.
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