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GRAINS-US corn rises on forecast for Midwest rain

Published 04/26/2011, 11:52 AM
Updated 04/26/2011, 12:00 PM
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* Corn rises on prospects for more planting delays.

* CBOT wheat falls on profit-taking after 2-month top

* Soybeans drop after three days of gains

* More rain in Midwest forecast, Plains seen dry

* Coming up: Traders monitoring U.S. Fed meeting (Recasts to include U.S. trading, adds details, new analyst, byline, dateline, previous BEIJING/PARIS)

By Mark Weinraub

CHICAGO, April 26 (Reuters) - U.S. corn futures rose on Tuesday, reversing early losses, as a rainy forecast for the U.S. Midwest threatened to further delay spring planting.

Wheat futures dropped on a profit-taking setback despite a supportive fundamental picture. Soybean futures also were weaker after a three-day winning streak, with traders noting some concerns that farmers may devote some of their intended corn acreage to soybeans if planting delays continue.

Traders were wary of taking on big positions before the end of the U.S. Federal Reserve's policymaking committee on Tuesday and Wednesday. The meeting was not expected to lead to a rate cut or a change to its $600 billion bond buying program, but a groundbreaking news conference by Chairman Ben Bernanke was expected to set a tone for the markets.

Chicago Board of Trade May corn was up 4-1/4 cents at $7.66-3/4 a bushel at 10:46 a.m. CDT (1546 GMT). CBOT May wheat was down 2-3/4 cents at $8.23-1/4 a bushel and CBOT May soybeans were down 7-1/4 cents at $13.82-1/4.

Damp soil in the Midwest has virtually stalled corn seeding in some key states with the window for optimum yields narrowing at a time when the United States needs a bumper crop to replenish extremely low supplies.

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The U.S. Agriculture Department said on Monday afternoon that just 9 percent of intended corn acreage had been seeded as of April 24. A year ago, corn planting was 46 percent complete and the five-year average for late April is 23 percent.

"You are going to see little if any fieldwork getting done here," said Mike Palmerino, forecaster at Telvent DTN. "There is just so much (corn) acreage this year that you just wonder if it is all going to get planted."

BUMPER S. AMERICAN HARVEST PRESSURES SOY

Additional pressure on soybeans came as overseas buyers look to South America to fill their soybean needs amid the harvest of a bumper crop from Argentina and Brazil.

"You are facing a little bit of headwind too from the fact that you have had some lousy (export) inspections here," said Dewey Strickler, president of Ag Watch Market Advisors. "We had been expecting a slowdown (in exports) and we are seeing it."

Farmers in the U.S. Plains were facing the opposite problem of their Midwest counterparts as dry weather stresses the developing hard red winter wheat crop. Little relief was forecast during the next 10 days, Palmerino said.

"It looks like that the areas that are the driest ... those areas are going to continue to struggle here," Palmerino said. "That is going to continue to likely allow for further deterioration in crop conditions."

The market had already factored in severe losses in southern reaches of the Plains but the crop in Kansas, the top wheat-producing state, was starting to deteriorate as well, Palmerino said. (Reporting by Mark Weinraub; Editing by Lisa Shumaker)

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