PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 19:49 GMT, Monday, 10th Apr 2017, by William Clarke
PM markets: corn prices rise on rain-threat to US sowings

Corn futures led wheat higher, as some concerns about US planting weather encouraged short-covering.

Markets are also poised for tomorrow's world agriculture supply and demand estimates from the US Department of Agriculture.

This report will probably prove to be less important for sentiment than last month's US planting and stocks estimates, but with investors heavily short in cereals, there is room for some short covering.

Rains could stall planting

Concerns are growing about possible delays to corn plantings.

"Rain showers will favour the central Midwest, northwestern Delta, and southeastern Plains today and will favour the far southeastern Midwest and Delta tomorrow," said Kyle Tapley at MDA Weather Services.

"Showers will develop across the Plains on Wednesday and will spread across the western Midwest on Thursday and Friday," Mr Tapley said.

Although the showers across the central US will be good for winter wheat prospects, it threatens to slow corn planting.

"Wetter weather is expected across the Midwest next week, which will further improve soil moisture levels, but stall corn planting," Mr Tapley said.

'Unfavourable prospects'

"Corn is trading firmer as wet weather in the central US threatens to delay start to US corn planting," said Kim Rugel, at Benson Quinn Commodities.

"With USDA reducing potential planted acres year-on-year, any delays to planting could further lower acreage intentions," Ms Rugel said.

"The planting forecast looks unfavorable this week in the Midwest to get the corn crop planted," said CHS Hedging.

"Rain and even snow forecasted in some areas."

Strong export inspections, new sales

Corn markets also got some support from US corn exports, with weekly inspections reported at a respectable 1.17m tonnes.

And the US Department of Agriculture reported flash sale of 101,000 tonnes of corn to an unknown destination was announced this morning for the 2016-17 marketing year.

May corn futures finished up 2.1%, at $3.67 a bushel.

Wheat futures also rose on short-covering, with May Chicago futures up 1.1% on the day, finishing at $4.28 ¾ a bushel.

Ran support for soybeans ease

Soybean markets got some early support from the unwanted weekend rains in Argentina.

But the fact is these rains were no more widespread than forecast, and weather is now expected to turn drier.

"Rains favoured most of the major growing areas in Argentina over the weekend… stalling corn and soybean harvesting," said Mr Tapley.

"Rain will linger in southern Santa Fe, Entre Rios, and Buenos Aires today, but dry weather is expected otherwise this week."

"The drier weather should ease wetness and allow corn and soybean harvesting to get back on track," Mr Tapley said. "Mostly dry weather should continue across the major growing areas next week."

And extra pressure on soybeans came from the tumbling palm oil markets, thanks to bigger-than-expected Malaysians stocks.

May soybean futures finished flat on the day, at $9.41 ¼ a bushel.

Cocoa prices slump further

The sell-off in cocoa markets continue, as the size of the forecast global cocoa production surplus is re-asserting itself after a stalled rally.

"The expectation of record-high global supply in 2016-17 is continuing to pressure prices, though there have been no new concrete figures to support this," said Commerzbank.

July New York cocoa settled down 2.1%, at $1,964 a tonne.

Coffee market eases

Coffee futures came under pressure, as Rabobank lifted its estimate of the production in the current year, by 2.3m bags, to 154.0m bags.

Rabobank lowered its forecast for 2017-18 by 2.4m bags, to 153.0m bags.

But the bank warned of a potentially "monstrous" crop from Brazil in 2018-19, thanks

May arabica coffee settled down 0.1%, at 139.85 cents a pound.

May robusta fell 0.7%, to settle at $2,154 a tonne.

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