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Grain futures mixed - Corn trades near 5-week high

Published 03/13/2013, 07:04 AM
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Investing.com - U.S. grain futures were mixed during early U.S. morning trade on Wednesday, with corn prices trading near the previous session’s five-week high amid worries over tightening U.S. supplies.  

On the Chicago Mercantile Exchange, corn futures for May delivery traded at USD7.1738 a bushel, up 0.4% on the day. The May contract rose by as much as 0.5% earlier in the day to hit a session high of USD7.1750.

The May contract rose to USD7.1762 a bushel on Tuesday, the highest level since February 8.

Corn futures have been on an upward trend in recent sessions after the U.S. Department of Agriculture said last week that U.S. stockpiles before the next harvest will total 632 million bushels on August 31, the lowest level in 17 years.

The USDA also revised up its forecast for the amount of U.S. corn that will be used for animal feed and "residual" purposes by 2.2% to 4.55 billion bushels.

Meanwhile, soybeans futures for May delivery traded at USD14.6762 a bushel, down 0.1% on the day. The May contract fell by as much as 1% earlier in the day to hit a session low of USD14.5938 a bushel, the weakest level since March 8.

Expectations for a bumper crop in Brazil continued to weigh on soy prices as farmers in the South American country started to accelerate harvesting of the nation’s soy crops.  

The USDA said last week Brazil will harvest a record 83.5 million tonnes of soybeans this spring, on pace to pass the U.S. as the top producer for the first time.

Elsewhere, wheat for May delivery traded at USD7.0638 a bushel, up 0.4% on the day. The May contract rose by as much as 0.5% earlier to hit a session high of USD7.0688 a bushel.

Wheat prices continued to move higher as traders closed out bets prices would fall lower after slumping to an eight-month low of USD6.8125 a bushel on March 6.

Wheat traders continued to monitor weather and crop conditions in the U.S. Great Plains-region, where prolonged dryness threatens dormant winter wheat crops.

Market analysts warned that prices of the grain remain vulnerable to the downside after the USDA last week raised its forecasts for U.S. wheat reserves at the end of the crop's current marketing year to 716 million bushels, 3.6% higher than the agency’s February estimate of 691 million bushels.

The upward revision reflected a decline in U.S. wheat export estimates due to stronger-than-expected foreign competition and plentiful supplies around the world.

Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.

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