MarketsFarm — Severe weather in the U.S. as well as macroeconomic factors at home and abroad affected grain prices on the Chicago Board of Trade (CBOT) for the week ended Wednesday.
Jack Scoville of Price Futures Group in Chicago said wet and cool weather across the U.S. Plains, Midwest and corn belt, as well as improving international demand, caused the May corn contract to rise 16.25 cents per bushel during the week, at $6.7225 (all figures US$).
“Here in the U.S., farmers are very tight for corn and soybeans,” he said. “Basis levels are still extremely high, even with the rally in the grain futures.”
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The May soybean contract gained 2.25 cents for the week ended Apr. 19 to close at $15.065/bu.
The May Chicago wheat contract also gained 2.25 cents at $6.8175/bu., while the Kansas City hard red wheat contract lost 1.75 cents, to $8.6175/bu., and the Minneapolis spring wheat contract was up seven cents, to $8.67/bu.
According to Scoville, wheat had been affected by numerous factors during the week.
“Wheat’s been up and down with what’s going on with the (Black Sea Grain Initiative),” he said. Russia has threatened in recent days to pull out of the agreement to let Ukrainian vessels transport grain.
As demand for U.S. wheat has been poor this marketing year, weather conditions threaten to cut this year’s crop.
“The weather in the Great Plains really sucks,” Scoville quipped. “The crop condition ratings are extremely low and that’s been supportive, as well.”
He believes grain prices will stay firm as May options expire on Friday, and first notice day is April 28. (First notice day refers to the first day on which a long or short holder of a futures contract who hasn’t rolled or closed that position can be required to make or take delivery of its underlying commodity.)
“The producers are not really selling anything right now and that will help support the market,” Scoville explained. “I expect more buying in the corn market from the Chinese and they might actually buy some U.S. soybeans along the way.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
