U.S. grain and soybean futures finished slightly higher Tuesday as concerns farmers will not sow enough acres this spring sparked a recovery from early losses.
Corn for May delivery, the most-actively traded contract, edged up 1/4 cent, or 0.04%, to $6.86 3/4 a bushel at the Chicago Board of Trade, above the session low of $6.73. Soybeans for May delivery rose 2 1/2 cents, or 0.2%, to $13.65 1/2 a bushel after reaching a session low of $13.44.
Market participants are nervous farmers will not plant enough corn and soybeans this spring to replenish tight supplies due to competition for acres from high-priced cotton. Wet weather also threatens to disrupt plantings of corn, which is sown earlier in the spring than soybeans.
"We still don't know what the acres are and what the weather is going to be," said Sid Love, analyst for Kropf & Love Consulting, an agricultural advisory firm in Kansas.
Grain users are particularly worried about weather problems reducing corn plantings as season-end supplies of the grain are projected to reach a 15-year low this year. Demand has been strong from producers of ethanol and livestock feed and from foreign buyers.
Corn futures reached 2 1/2-year highs this month on supply worries but have since pulled back 6.6%. Soybean futures have retreated 6.2% since climbing to a 2 1/2-year high in February.
"I don't think the fundamentals have really changed all that much," Love said.
Absent a significant development, trading should remain choppy and two-sided until federal forecasters issue estimates for spring plantings and quarterly grain stocks in crop reports March 31, said Shawn McCambridge, senior grains analyst for Prudential Bache, a brokerage firm in Chicago. Market participants are "just kind of biding our time until we get to those reports," he said.
Traders are still looking for verification of corn export sales to China, which is seen as a wildcard in the market due to its buying power and uncertainty about its demand needs. Widespread talk of sales pushed corn futures sharply higher late last week, but the business has not been officially confirmed by the U.S. Department of Agriculture.
Wheat futures felt support from continued concerns about dryness threatening crops in the U.S. Plains. Soft red winter wheat for May delivery closed up 1 1/4 cents, or 0.2%, to $7.22 1/4 a bushel at the CBOT after reaching a session low of $7.05 1/4.
Hard red winter wheat for May delivery rose 0.4% to $8.45 a bushel at the Kansas City Board of Trade. Hard red spring wheat for May delivery slipped 0.4% to $8.66 at the MGEX in Minneapolis.
Rice for May delivery edged up 0.1% to $13.85 1/2 per hundredweight at the CBOT. Ethanol for May delivery slipped 0.08% to $2.479 per gallon, while oats for May delivery dropped 2.3% to $3.42 a bushel. Soymeal for May delivery closed flat at $366.40 per short ton, and soyoil for May delivery slumped 0.04% to 55.86 cents per pound.