Soybean, Corn Premiums Rise as Rain Slows Shipping, Farmer Sales

Cash premiums for soybeans and corn shipped in May to terminals near New Orleans rose relative to Chicago futures as shipping delays and reduced farmer sales tightened supplies.

The spot-basis bid, or premium, for soybeans delivered next month was at 64 cents to 70 cents a bushel above May futures, up from 60 cents to 70 cents yesterday, U.S. Department of Agriculture data show. Corn basis bids rose to 55 cents to 61 cents a bushel above May futures, compared with 54 cents to 57 cents yesterday.

“More than 40 percent of the river shipping has been halted by flooding this week,” said Dave Marshall, a farm marketing adviser for Toay Commodity Futures Group LLC in Nashville,Illinois. “Farmers and major exporters have a reason to retain ownership of corn and soybean supplies” with rains delaying the start of the U.S. planting season, he said.

Soybean futures for May delivery surged 42.5 cents, or 3.1 percent, to close at $13.9275 a bushel on the Chicago Board of Trade, the biggest gain for the contract since March 17.

Corn futures for May delivery rose 31 cents, or 4.3 percent, to close at $7.54 a bushel on the CBOT.

Corn inventories in the U.S., the world’s largest producer, will fall to a 15-year low on Aug. 31, the USDA said on April 8. Soybean reserves as a percentage of consumption will drop to the lowest since 1965 before this year’s harvest, the government said.

Major flooding is reported at 63 locations, down from 66 yesterday, data from the National Weather Service show. A record crest on the Ohio River near Cairo, Illinois, is expected on May 1, according to the agency.

“For a world that needs a big crop this year to rebuild inventories, it’s not off to a very good start,” Marshall said. “Everyone knows supplies are going to be very tight before this year’s harvest.”

(Source: http://www.bloomberg.com/news/2011-04-29/soybean-corn-premiums-rise-as-rain-slows-shipping-farmer-sales.html)