U.S. corn futures ended mixed Monday, as the market was torn between the conflicting influences of broader commodity weakness and the threat of weather problems trimming production and acreage prospects.
The nearby July futures stumbled, succumbing to investor selling after the U.S. dollar bounced on worries about the European debt crisis. Meanwhile, the dominant issue for deferred contracts that represent crops to be harvested in the fall was weather, as unfavorable conditions for seeding corn in the eastern Midwest and northern plains continued to raise the threat of smaller-yield potential.
Chicago Board of Trade July corn settled 5 1/2 cents or 0.7% lower at $7.54 a bushel, and December corn ended up 4 cents or 0.6% at $6.70 1/2.
A tight supply scenario in the U.S. places increased pressure on U.S. farmers to produce bumper crops in 2011, with federal forecasters already projecting supply tightness despite farmers planting more acres than a year ago.
Further support was generated for deferred contracts from exporters inspecting 4.6 million bushels of U.S. corn for shipment to China from the Louisiana Gulf in the week ended May 19, according to federal data. Confirmation of the inspections from the U.S. Department of Agriculture follows recent talk of export sales to China.
A larger-than-expected increase in the number of cattle added to U.S. feedlots fueled ongoing concerns about strong demand for corn, used to feed livestock. The USDA on Friday reported cattle placed into feedlots in April jumped 10% from a year earlier while analysts were looking for a 4.3% increase. Grain users are nervous because corn inventories are projected to drop to a 15-year low this year.
The market managed to bounce off initial lows, managing to stabilize once selling in outside energy markets cooled down. "Basically I think they just woke up and smelled the roses. We have to be worried about our own fundamentals," said Jerry Gidel, analyst with North America Risk Management Services in Chicago.
U.S. wheat futures finished mixed, as a rising U.S. dollar weighed on nearby CBOT wheat. Worries about tightening supplies of high-quality grain due to unfavorable weather in U.S. and Europe helped support deferred contracts and other markets, analysts said. Excessive rains delaying planting of spring wheat in the northern U.S. Plains was a boost for Minneapolis spring wheat. CBOT July wheat fell 3 1/2 cents to $8.03 a bushel, KCBT July slumped 2 1/4 cents to $9.31, and MGE July added 1 1/4 cents to $10.01.
U.S. soybean futures ended mostly lower, under pressure from broader-based commodity weakness amid a rising U.S. dollar. A strengthening dollar is a negative influence on price as most raw materials are dollar-denominated, making it more expensive for foreign buyers to import. CBOT July soy settled down 6 1/2 cents at $13.73 3/4 a bushel while November ended up 1/4 cent at $13.50 3/4 a bushel.
CBOT soyoil settled 0.24 cent or 0.4% lower at 57.22 cent/pound, and July soymeal ended $1.80 or 0.5% lower at $358.80/short ton. U.S. rice futures ended weaker in a slight pullback from three-month highs. CBOT July rice slipped two cents to $15.08/hundredweight.
U.S. oat futures stumbled on profit-taking and pressure from the firm dollar. Oats for July delivery dropped 3 cents, or 0.8%, to $3.61 a bushel. Ethanol futures pulled back on profit-taking, with the July contract dropping 2.1 cents, or 0.8%, to 2.645 per gallon.