The Chicago Mercantile Exchange Group has announced plans to extend trade hours on the Chicago Board of Trade (CBOT) on May 21. Trade will now start at 5 p.m. CT on Sunday night, and remain open until 4 p.m. the following day.

Monday through Thursday the CBOT will start trade at 6 p.m. and trade through 4 p.m. the next day. This decision was made to more closely align the U.S. commodity market with the global market, and to help traders manage risk.

(According to a CBOT press release, these hours apply to corn, mini-sized corn, soybeans, mini-sized soybeans, wheat, mini-sized wheat, soybean meal, soybean oil, rough rice, oats and ethanol futures and options, plus all related calendar spread options and inter-commodity spread options.)

A concern with this change is that trade will now be open when USDA reports are released. The open outcry hours will remain the same, from 9:30 a.m.-1:15 p.m.

We are at the point of the marketing year when we start to see a general shift in trade attitude. Trade is now becoming less interested in old-crop inventory and more so with new-crop production.

In turn, this will put more emphasis on weather forecasts and any conditions that could impact final yield. This change will become more noticeable once the May supply and demand report is released, as that contains our first look at new-crop balance sheets.

This shift in attitude does not necessarily mean old-crop contracts will collapse. Many buyers across the Corn Belt still need to encourage old-crop sales, especially soybeans. Higher old-crop bids may also encourage more double-cropping of soybeans in the United States.

Analysts are using this year’s rapid corn planting pace as an indicator of final yield potential. History indicates when at least 40 percent of the corn crop is planted by May 1, the chances of above-trend yield increase.

While this is true, we need to remember there is a lot of growing season ahead of us and many factors that will still affect final yield. This was the exact case two years ago, when the fastest corn planting pace in history was followed by well-below-trend yields.

More interest is being placed in the amount of double-cropping that may take place in the United States this year. At current market values, a producer only needs a soybean yield of 10 bushels per acre to cover their cost of production.

In most markets, a second crop of soybeans, likely following wheat, will generate $200 of additional revenue per acre. This practice will not add a sizable amount of soybeans to the nation’s supply, but it will help ease concerns of shortages.

New-crop soybeans are finding support from the push for acres in South America. Now is the time when planting decisions are made in South America, and a push in the complex will encourage seedings. This is especially true given the slight advantage corn production has over soybeans at the present time.

Not only did adverse weather affect Brazil’s soybean crop this year, but so did Asian rust fungus. Soybean yields in the main production state of Mato Grasso were reportedly 5.8 percent lower from the disease.

Asian rust destroys the foliage on a soybean plant, making it difficult for reproduction to take place. It is believed rust losses will cost Brazilian farmers $404 million this marketing year.

The price spread between new-crop corn and soybeans continues to widen. In 2009 this spread widened to just over 3:1. It is not out of the question we could see this wide of a price ratio again this year.

Many economists believe this will cause acres to shift from corn to soybean production, but getting enough to cover for the 735 million-bushel shortfall in South American soybean production is unlikely.

Karl Setzer is a Commodity Trading Advisor/Market Analyst at MaxYield Cooperative. His commentary and market analysis is available daily on radio, in newsprint and on the Internet at www.MaxYieldCooperative.com

The opinions and views in this commentary are solely those of Karl Setzer. Data used for this commentary obtained from various sources believed to be accurate.

This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.