GRAINS-CBOT corn, soybean futures rally on USDA planting estimates, stocks data

By P.J. Huffstutter

CHICAGO, March 31 (Reuters) - Chicago Board of Trade soybean and corn futures turned higher on Tuesday after two closely watched government reports forecast robust corn demand and said U.S. farmers this spring would plant less corn and more soybeans than last year.

Farmers intend to plant 95.338 million acres of corn, down from 98.788 million acres last year, the U.S. Department of Agriculture said in a prospective plantings report. Analysts polled by Reuters had expected a reading of 94.371 million acres.

The agency on Tuesday published its first survey-based U.S. crop acreage estimate of the year in a prospective plantings report, along with quarterly grain stocks data.

The survey collected data on farmer planting decisions from the first couple weeks of the U.S.-Israeli war on Iran, which has driven up both fertilizer and fuel prices. Corn and wheat require more costly fertilizer, making them less attractive than soybeans to growers as the war disrupts global shipments.

Meanwhile, soybean plantings will expand to 84.7 million acres from 81.215 million acres last year, the USDA said, an acreage number that, while the highest in two years, fell below analysts' expectations.

Wheat futures also turned higher for a second straight session as persistent dryness in the U.S. Plains threatened to curb winter crop yields and traders kept the conflict in the Middle East in focus. In Kansas, 40% of the crop was in good or excellent condition as of Sunday, the USDA said. That figure was down from 46% a week earlier and 49% a year ago.

While traders have been closely tracking dry conditions across the U.S. Plains in regard to potential impacts on the wheat crop, there is growing concern it also might impact the start of the corn and soybean growing seasons, market analysts said.

The most-active wheat contract on the Chicago Board of Trade Wv1 ended the day up 9-1/4 cents at $6.16-1/4 per bushel, after the contract reached the highest price seen since March 9 earlier in the trading session. Soybeans Sv1 settled 11-1/4 cents higher at $11.71 per bushel, while corn Cv1 ended up 2 cents at $4.57-3/4 per bushel.

The USDA also reported on Tuesday the all wheat planted acreage this year is estimated at 43.8 million acres, down 3% from a year earlier, which would be the smallest wheat acreage planted since the agency's records began in 1919.

But the rally in wheat prices had more to do with investors betting the Iran war will end sooner rather than later, said Jack Scoville, vice president of Chicago-based Price Futures Group.

"That region is a major importer of wheat, and imports might start flowing again," which would boost demand, Scoville said.