Glacier FarmMedia—United States wheat futures rose sharply during the week ended May 15, while corn and soybean futures at the Chicago Board of Trade (CBOT) were in a rangebound, up-and-down pattern.
The July Chicago wheat contract jumped 31.75 U.S. cents per bushel during the week to close May 15 at US$6.6575. July Kansas City hard red wheat rose 26.5 U.S. cents/bu. to US$6.75, while its Minneapolis spring wheat counterpart gained 24.25 U.S. cents/bu. at US$7.27.
Meanwhile, July corn moved up four U.S. cents/bu. at US$4.6250 despite hitting US$4.75 earlier in the week. July soybeans dropped 14.25 U.S. cents at US$12.1350 after having surpassing the US$12.50 mark for the first time since late January.
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Ryan Ettner of Allendale Inc. in McHenry, Ill. said short-covering by the funds was the main reason for broad strength in grain markets earlier in the week. But when it slowed down, concerns over frost-damaged wheat crops in Russia picked up wheat prices once again.
“Now, high prices have become almost solely based on Russian weather concerns. Unfortunately, there’s no way we can confirm or deny (whether they had damage) to be sure,” Ettner said.
Meanwhile, recent rains in the U.S. Midwest have slowed down the planting pace for corn and soybeans, causing varied price movement. Earlier this week, the U.S. Department of Agriculture (USDA) reported that corn planting was five percentage points behind the five-year average, while soybeans were one point above. However, weather forecasts suggest more precipitation for next week in those growing regions.
“Your support comes from the slow planting pace and the forecast says we’re not going to pick up that pace over the next 10 days,” Ettner said.
He added that the effect from the USDA’s World Agricultural Supply/Demand Estimates released on May 10 still lingers over the grain markets.
“Their report basically says if everything straightens out in the weather department and we don’t have too many risks and we have an overall normal year, their numbers basically forecast a slow grind lower all the way from now until the end of the year,” he added.
The funds have only stayed away from grain markets over the past two days, according to Ettner, but should that continue, he expects prices to come down over the next two weeks. In the absence of severe weather events, Ettner thinks prices could decline in June and July.
“If that’s the case, corn (should) set back 10 to 15 (U.S.) cents, beans 20 to 30 cents. But then, you’ll find a few buyers stepping in,” Ettner explained. “I think (there will be) a small correction and then you’ll find solid support … After that point, it’s right back to weather maps.”
—Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
