By Gary Wulf
Of DOW JONES NEWSWIRES
SUPERIOR, Neb. (Dow Jones)--Seasonal harvest pressure was brought to bear on cash prices for U.S. corn and soybeans this week, a trend analysts feel is likely to continue, barring a bullish surprise from Tuesday's U.S. Department of Agriculture crop-production report. However, farm-gate prices for wheat appreciated by about 5 cents to 11 cents per bushel.
Spot soybean prices plunged to one-month lows, as January CBOT futures lost 21 1/2 cents, and average interior basis weakened by another 7 1/2 cents.
"Farmers are selling soybeans off the combine and buyers are anxious to move them to the Gulf before winter sets in," said Farm Progress market analyst Arlan Suderman. "Barge traffic is heavy on the Mississippi river and two-thirds of the barges contain soybeans."
CIF bean basis also shed as much as 11 cents a bushel, despite very active export shipments.
"There are many cargoes of soybeans en route to China. Traders and analysts are concerned that some cargoes may be rejected, due to damage from poor harvest conditions," said the CME Group.
Cash corn prices also sagged under the weight of heavy harvest activity this week, as domestic basis declines, which averaged 2 1/2 cents, more than offset a 1 cent rise in the CBOT December futures contract.
"Harvest is rapidly advancing and cash basis tone is weak," said Early Market News analyst Duane Lowry. "Traders are focused on Tuesday's USDA reports, but harvest [yield] results and this week's private estimates make it seem unlikely that we will find a bullish surprise."
Export basis bids for cash corn were 4 cents to 5 cents weaker this week.
"Cash market traders indicate that more corn has come into the supply pipeline in the U.S. this week, with the pace of farmer selling expected to increase in coming days and weeks," added the CME Group. "One cash trader noted that this is the sort of selling that normally would have occurred one to two months ago, if weather had been normal going into harvest."
Meanwhile, futures and basis for spring and winter wheat each strengthened this week, ultimately lifting prices by about 1% to 2%.
Cash contracts of wheat climbed 2 cents to 5 cents at U.S. futures exchanges, while interior basis added further flat-price strength, with jumps of 2 1/2 cents to 6 cents a bushel.
"The lack of receipts provided a firmer undertone," said Kevin Kjorsvik with Benson Quinn Commodities. "Farmers are concentrating on bean harvest right now, putting further spring wheat sales on the back-burner. Country elevators will play catch up on soybean obligations by loading bean trains, which should help keep [wheat] receipts light for the foreseeable future."
Export basis for wheat was mixed. CIF hard red winter wheat values were as much as 8 cents weaker, although barge/track bids offered in the Gulf/Pacific Northwest were up 5 cents to 9 cents for SRW and as much as 15 cents for HRS wheat. Analysts said a seasonal increase in row crop movement reduced the amount of freight capacity available to transport wheat.
CROP WEATHER
"Dry, unusually warm weather continues to promote fieldwork and winter wheat growth. Summer crop harvesting is accelerating, but remains behind the normal pace in nearly all locations," said USDA meteorologist Brad Rippey. "Many producers continue to struggle with wet soils and harvested crops that need to be mechanically dried due to high moisture content."
Harvest activities remain completely stalled in some portions of the Delta, due to residual lowland flooding resulting from record October rainfall.
"During the weekend, tropical moisture--including the remnants of Hurricane Ida--will move northward across the Gulf of Mexico," said Rippey. "Rainfall could reach portions the U.S. Gulf Coast by Sunday, before overspreading the Southeast early next week."
Showers will also return to the Midwest early next week, while heavy rain/snow develops in the Pacific Northwest, where as much as four inches to six inches of additional precipitation may fall by the middle of next week.
-By Gary Wulf, Dow Jones Newswires; Gary.Wulf@dowjones.com
(END) Dow Jones Newswires
11-06-09 1524ET
Copyright (c) 2009 Dow Jones & Company, Inc.
