CHICAGO -- U.S. corn futures soared nearly 4 percent Monday, hitting a record high on fears that cool, wet conditions in the U.S. Midwest would limit the U.S. planting pace and might ultimately favor more soybean acres, traders said.
"From Illinois westward, the pattern is unfavorable for planting. There is not going to be any major change as we look out to the first week of May," said forecaster Mike Palmerino of DTN Meteorlogix.
After the close, the U.S. Department of Agriculture said the U.S. corn crop was 10 percent planted by Sunday, well behind the five-year average of 35 percent and lagging trade estimates for 15 to 19 percent.
The late start could eventually limit the corn crop's yield potential, or prompt farmers to switch intended corn acres to soybeans, which are typically planted after corn.
"There is concern about corn planting (getting) off to a slow start, one of the slowest starts we've had here in a decade," said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.
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The same weather scenario drove soybean futures lower by raising the prospects for a big jump in U.S. soybean seedings.
"Soybeans are taking a pasting on fears that maybe that would translate into more bean acres," Roose said.
Corn futures climbed to the day's highs late in the session, after updated midday forecasts looked a little wetter for late this week and reinforced outlooks for cool and wet weather in the 11- to 15-day period.
On the Chicago Board of Trade, the front May corn contract settled up 22-3/4 cents at $6.00 per bushel, while new-crop futures for December delivery climbed 23-1/2 cents to settle at $6.30-1/4.
The deferred July 2009 contract rose to $6.51, a new all-time high for the corn market.
ARGENTINE LABOR SITUATION EYED
Soybean futures fell hard, pressured both by U.S. planting weather and signals that Argentine farm leaders might extend a deadline to resume a strike that shut down grain exports last month.
Such an extension would likely limit export demand for U.S. soybeans and soy products. Argentine farmers have threatened to resume their strike on May 2. Both sides have been negotiating for weeks without an agreement.
"It's all very uncertain, but the market chose to sell first and ask questions later," one CBOT trader said.
CBOT May soybeans fell 42-1/4 cents, more than 3 percent, to settle at $12.83-1/2 per bushel.
The suggestion of an extension, made by a key Argentine farm leader, came four days after the resignation of Economy Minister Martin Lousteau, blamed by many farmers for implementing a new sliding-scale tax scheme on grains exports that hiked the levy on soy products.
Lousteau's decision to step down Thursday was welcomed by farm leaders who said they hoped talks could move forward.
"If we start with the assumption that Lousteau committed an error, there are chances that some things can be revised," said Eduardo Buzzi, president of the Argentine Agrarian Federation.
"If some clear conditions emerge, it's easier and likely we can (keep talking) beyond May 2," he told local television.
BOUNCE IN WHEAT
U.S. wheat futures closed higher on a technical bounce after plunging over the last six weeks on improving prospects for a large global wheat crop. Corn's rally lent additional support.
CBOT May wheat settled up 25-1/2 cents at $8.26 per bushel. The May contract touched a low of $7.99 a bushel on Friday, its lowest level since November, with the contract falling more than 40 percent from a record peak of $13.49-1/2 set in late February.
"At these prices, wheat can be considered a feed grain again. My bet is people are starting to bid on the wheat market for feed demand again because now it makes sense," said Mehdi Chaouky, research analyst with Swiss-based fund Diapason Commodities Management.
CBOT rice futures fell the maximum daily amount on profit-taking after last week's all-time highs, and on prospects for Asian rice prices to ease as the outlook for new-crop supplies improved.
CBOT May rice settled down the daily limit of 50 cents at $23.30 per hundredweight.
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