Corn, Soybeans, Wheat, Oats Up on Expected Midwest Rains

Weather has given and now weather is taking away, the price of the major grains in the U.S., as hot and dry weather in the western and eastern parts of the Midwest had traders pushing up the prices on concerns over a smaller harvest for corn, soybeans, wheat an oats.

That has changed now as longer term contracts dropped on news the majority of the Midwest should receive up to 3 inches of rain over the next week, essentially eliminating the potential for damage.

Approximately 90 percent of the fields north of Omaha, Nebraska and Columbus, Ohio are expected to receive the rain.

Soybean delivery for November dropped 2.75 cents, or 0.3 percent, to $9.8525 a bushel, while corn futures for December delivery declined 1 cent, or 0.2 percent, 50 $4.0425 a bushel early in the Friday trading session on the Chicago Board of Trade.

Since the end of June, corn futures have gained 18 percent on revised production, weather concerns and demand from China and ethanol producers.

Wheat had also been going higher because of the possibility it would have to be used as a supplement for animal feed if corn faltered.

Commodities: Grains Up on Weather

Grain Prices Up

With weather projected to have a negative impact on spring planting, grains responded by rising in price, with major crops wheat, corn and soybeans all increasing today.

Other factors helping grains jump up were the stock market rising and the dollar weakening again.

In the Midwest, it's expected to be wetter than it normally is, and in southern States like Texas, it's expected to be cooler; bringing doubt as to how the planting season will launch.

Floods are forecast for a number of Midwestern states, including Minnesota, Iowa and North Dakota.

This is all typical of this time of the year, and once acreage is detemined by the USDA, things always settle back down to market forces and usual grain pricing behavior follows.

Grain Prices Up

Grain Prices Rise on Short Covering

Grain Prices Going Up

With the crop report about to come out, grain prices rallied some as investors raced to cover their positions in case something unexpectedly changes which would tear into their short positions.

Wheat, corn and soybeans were all up as the shorts were covered, as the crop report from the Department of Agriculture is due.

With grain prices having downward pressure for a month on large inventories, they are due for an upward move, and grain traders want to protect themselves from that.

The concern is if for some reason the supply of grain has declined in any way; an unlikely scenario, but you never know in the markets.

If nothing has happened to change the grain levels, we should see a lot of short positions entered into again.

Wheat for March delivery rose 10.75 cents, a 2.3 percent gain, to settle at $4.84 a bushel. Soybeans increased 16 cents to $9.295 a bushel, and corn increased 4.5 cents to $3.56 a bushel.

Grain Prices Going Up

Commodities: Corn Futures Under Pressure

There are many reasons and variables why commodities in general are making an expected comeback, while agricultural commodity grains continue to struggle.

Corn is one of those, as it dropped for the second day in a row, while its commodity counterparts outside of grains made significant increases, including oil, gold and silver.

Corn futures, and other grain futures will continue to battle to retain price thresholds as the economic slowdown cuts back on governments spending money in the U.S., which in general has higher grain prices.

The price of corn futures has already fallen over 50 percent since early summer, and there's nothing in play that will keep that from continuing on.

While the Argentine drought has cut into wheat, corn and soy production, it doesn't look like it'll cause any shortages, as global production has been up this year.

There has been nothing wrong with the grain this year, as the yield for corn has been good, and production solid. That's not the problem, as with oil. There's just so much people are willing to spend this year across the world, and demand, more than anything else is what's driving corn futures, as well as most other commodity markets.

Now that government spending have been irresponsibly brought into the mix, farmers, companies and investors are looking to them for solace, rather than allowing the market to clean itself out and poorly run businesses to fail.

So with corn storage, production and yield being fine, the deciding factor will be the economies of the individual countries and the willingness to spend on grains, including corn.

Until the pocketbooks are opened up again, corn futures, along with all grain futures, will continue to be under downward pressure.

Accordingly commodity grains and the corn belt that produces them will struggle until the economic conditions improve. From what it looks like, it'll be some time before that battle will be over.