US corn prices fell 1 percent on Monday to a one-week low in its biggest drop in five trading days, and soya eased, as futures traders liquidated long holdings amid worries of possible bearish surprises in the USDA grain report on Tuesday. "It's choppy before tomorrow's supply and demand numbers. Everyone is expecting the government to cut the stocks but there always could be a surprise," said Brian Hoops, an analyst for Midwest Market Solutions.
Wheat turned higher on short-covering which was also tied to position-squaring before Tuesday's government data. CBOT May corn was down 9-1/4 cents per bushel at $6.49, May soya was down 3 at $14.31 and May wheat was up 4-1/2 cents at $6.43. The USDA will update its monthly global crop production and US ending stocks forecast at 7:30 am CDT (1230 GMT) on Tuesday.
US corn supplies in the report are expected to fall to a fresh 16-year low before the fall harvest, said analysts polled by Reuters. That could signal razor-thin supplies this year, which could stoke food inflation and hurt margins for food companies. "After the report, everyone will turn their attention to weather and corn plantings. I expect plantings at 8 to 10 percent this week but after this week they'll plant at record pace because the insurance safe dates will have been met," Hoops said.
If farmers plant too early they risk losing crop insurance benefits should a disaster strike their crops. Farmers have been planting corn at the fastest pace ever in the US Midwest grain belt this spring, leading to some concern the crop may be vulnerable to harm from cold weather.
Cold snaps each morning most of this week should remain in the northern portion of the US Midwest, posing a minor threat to the 2012 corn crop since only a small portion of it has been planted and very little has emerged, agricultural meteorologists said.A Reuters poll of 14 analysts pegged US corn seeding at 8 percent complete as of April 8, which would double the previous early-April record of 4 percent. A year ago, farmers had seeded 3 percent of their crop.
Most Midwest farmers kept their planters in the equipment shed, even as farmers further south made good progress. The farmers who held back were concerned about insurance and worried that the weather might take a turn for the worse following a record warm March, analysts said. "A lot of these guys are still going to go ahead and wait," said Shawn McCambridge, an analyst with Jefferies Bache. "It is only early April. Even though the weather has been favourable, we can get a shot of cold weather again."
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