Front-month U.S. corn and soybean futures rose on Wednesday on concerns that supplies will dwindle before the next harvest, while deferred contracts sank.
Inventories of crops left over from last year's drought-reduced harvest are scarce ahead of the autumn harvest. Rain-delayed planting this spring will likely mean a late harvest, so supplies will need to stretch longer into the autumn.
However, the springtime rains could boost the size of the crops and help replenish inventories after harvest begins.
Traders were buying the nearby, or old-crop, contracts and selling the new-crop contracts in spread trades.
"The tight supplies in old-crop corn... that's definitely supporting the July contract," said Paul Georgy, president of Allendale. "There's more talk among people that the rain now is beneficial."
Nearby prices, especially for soybeans, were also underpinned by concerns that near-term demand could whittle down stocks more than currently forecast.
"I think there is a concern that we are crushing at an unsustainable rate," said Rich Feltes, vice-president of research for RJ O'Brien.
"In the last eight years, final soybean stocks have been below USDA's June forecast in six of those years. So there is a fairly strong tendency for USDA to underestimate soybean demand in the June crop report."
Chicago Board of Trade July soybeans, the spot contract, climbed 3-1/4 cents, or 0.2 per cent, to $15.32 per bushel after earlier hitting a peak of $15.49, the highest level for a spot contract in seven months. New-crop November fell 16 cents, or 1.2 percent, to $13 a bushel (all figures US$).
CBOT July corn rose 1/4 cent to $6.60-3/4 a bushel while December corn fell 10-3/4 cents, or 1.9 per cent, to $5.42-1/4 a bushel.
Nearby contracts of both commodities settled below their session highs after late-session profit-taking.
The new-crop contracts were pressured by ideas that farmers will be able to plant their intended acreage, despite the abundant rain that delayed spring fieldwork.
"The sowing program is a bit behind but they are catching up quickly, and with good weather it will come to an end," said Andrew Woodhouse, grains analyst at Advance Trading Australasia.
South Korean GMO tests
Wheat slipped slightly, even as South Korea said on Wednesday that it had found no genetically modified (GM) grain in tests so far on imports from the U.S. state of Oregon.
Korean millers last week suspended wheat imports from the U.S., pending tests, after news that unapproved GM wheat had been found growing in Oregon. The discovery of the GM wheat sparked fears that importing countries would turn away from U.S. wheat.
Monsanto said broad testing of commercial seeds in Washington and Oregon revealed no sign of the unapproved wheat and that it was possible the illegal grain was planted by a saboteur.
"The wheat market is relieved that the GMO problem is not having such a large impact as some feared, but is also being underpinned by belief that risk remains for the U.S. harvest," said Commerzbank analyst Carsten Fritsch.
CBOT July wheat was settled down 7-1/2 cents, or 1.1 per cent, at $7.01-1/2 a bushel.
-- Tom Polansek and Karl Plume
report for Reuters from Chicago. Additional reporting for Reuters by Colin Packham in Sydney, Michael Hogan in Hamburg and Julie Ingwersen in Chicago.