Corn, Soybean Futures Rise as U.S. Midwest Farmers Slow Sales

Corn and soybeans rose on signs that a drop in prices discouraged U.S. farmers from selling record crops harvested late last year, tightening available supplies for exporters and processors.

The average cash bids for corn and soybean sales for immediate delivery dropped in three of the past four sessions, U.S. Department of Agriculture data show. As lower prices slowed sales by farmers, snowy and cold weather in much of the U.S. disrupted transportation of grain from silos.

“Farmers won’t sell when prices fall,” said Greg Grow, the director of agribusiness for Archer Financial Services in Chicago. “Farmers won’t sell any more of last year’s crops until prices rally and there is more information about the weather for spring planting.”

Corn futures for May delivery rose 7.5 cents, or 2 percent, to $3.8625 a bushel on the Chicago Board of Trade, the third gain in four sessions. The most-active contract touched $3.8775 on Feb. 22, the highest price since Jan. 12.

Soybean futures for May delivery rose 3.5 cents, or 0.4 percent, to $9.63 a bushel on the CBOT, after earlier declining as much 0.8 percent. Yesterday, the commodity touched a five- week high of $9.85 before finishing down 1 percent.

Flood Concerns

Corn prices also rose on speculation that melting snow covering much of the central U.S. will cause flooding, leading farmers to plant fewer acres, or seed late, reducing yield potential, Grow said. The USDA earlier this month said about 89 million acres may be planted with corn this year, up from 86.5 million in 2009.

As much as 6 inches (15 centimeters) of water is locked in the snow covering Midwest and northern Great Plains fields, the highest level in at least five years, said Mike Tannura, the president of T-Storm Weather in Chicago.

Below normal temperatures will inhibit melting for the next week, Tannura said.

“Anything that increases the anxiety that weather may disrupt timely planting will be supportive for the corn market” after two years of planting delays, Grow said.

The U.S. is the world’s biggest producer and exporter of corn, the country’s largest crop, and soybeans, the second- largest, according to government data.

By Jeff Wilson
Source: Bloomberg