Chicago Board of Trade (CBOT) corn futures fell on Tuesday on profit-taking and expectations that U.S. farmers will make significant planting progress this week, traders said.
"There is some optimism with planting progress," said Ken Smithmier, analyst at the Hightower Report in Chicago.
"We have a well-advertised storm system moving in by late this week. The farmer is well aware of that, and he is going to try to get as much done as he possibly can until he starts seeing raindrops on the windshield," Smithmier said.
Bruce Rowher, a producer from Paullina, Iowa, who is president of the Iowa Corn Growers Association, concurred.
"It's pretty frantic in our area as everyone is pushing hard to get as much planted before the next round of precipitation," Rohwer wrote in a planting update Tuesday.
At the CBOT, most-active July corn ended down three cents at $6.52-1/2 per bushel and July soybeans settled down 4-1/2 cents at $14.14-3/4 a bushel (all figures US$).
Wheat edged higher while staying inside of Monday's trading range. CBOT July wheat ended up one cent at $7.10-3/4 a bushel.
On Wall Street, stocks rose to record highs on hopes that steady U.S. economic growth will extend their stellar run, while the strengthening dollar curbed the appetite for oil and gold.
Both corn and soybeans retreated after hitting chart-based resistance levels. The benchmark July soybean contract fell back from a six-week high set early in the session.
However, new-crop November soybeans ended higher as traders exited long July/short November spread positions, following the midday expiration of CBOT May contracts.
The July soy contract gained against November for most of this month, supported by strong cash markets, dwindling supplies of old-crop U.S. soybeans and the absence of deliveries against the May contract.
Ahead of its expiration Tuesday at 12:01 p.m. CT, May soybeans surged to $15.45/bu., the highest spot soybean price on a continuous chart since Nov. 2. The contract pared gains to settle at $15.24-1/2.
After May expired, traders took profits on July/November soybean spreads as well as July/December corn and soymeal spreads.
"The feeling was that once the May went off the board, you can relax that stuff for a bit. I think everybody believes the May was going to be biggest as far as fireworks for this year," said Charlie Sernatinger of ED&F Man Capital in Chicago.
The CBOT has reported no deliveries of soybeans, corn or soymeal so far during the May delivery cycle, a sign that commercial grain handlers see more value in selling into the firm cash market than in delivering against futures.
Uncertainty about the impact of planting delays in the U.S. Corn Belt continued to underpin the market. The U.S. Department of Agriculture late Monday said U.S. farmers had seeded only 28 per cent of their corn, the slowest pace on record, amid wet and cool weather.
Soybean planting was six per cent complete, a 29-year low. The five-year average pace is 24 per cent for soybeans and 65 per cent for corn.
"Crop concerns have re-emerged and will remain in the forefront over the next fortnight or so," said Luke Mathews, an analyst at Commonwealth Bank of Australia. "The current slow pace signals that it needs to be virtually perfect over the next couple of weeks to bridge the gap."
Drier weather early this week in the U.S. Midwest should boost fieldwork before more showers develop late on Wednesday and continue into the weekend, with the heaviest rain in the northern Midwest.
Planting worries helped corn rebound on Monday from losses on Friday when a USDA report containing its first full projections for 2013-14 forecast a bigger-than-expected recovery in U.S. corn stocks on the back of a record harvest.
Wheat markets ended modestly higher after a choppy session, underpinned by expectations of fresh U.S. exports and concerns about dry weather in the Black Sea region.
A growing concern is dry weather in Russia and Ukraine, where analysts and forecasters say grain yields will suffer if rain does not return in the next few days.
"The USDA is far too optimistic about the Black Sea crops. They're above the top end of trade estimates," a European trader said, referring to forecasts in Friday's USDA world report.
In its weekly crop progress report, USDA said 32 per cent of the U.S. winter wheat crop was rated in good to excellent condition, unchanged from the previous week.
-- Julie Ingwersen
covers the CBOT corn, soy and wheat markets for Reuters in Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.