Good crop weather pressures U.S. corn, soy

U.S. new-crop corn prices fell for a third straight session on Monday as favourable growing weather across the midwestern United States reinforced the prospect of a record-large harvest this year.

New-crop soybeans also slumped for a third day, but declines were more tempered than in corn as rain in parts of the western Corn Belt prevented some farmers from planting the last of their soy crop.

U.S. wheat prices plunged more than two per cent in the steepest drop since mid-April, pressured by an accelerating Northern Hemisphere harvest and reports of stronger-than-expected winter wheat yields in the United States.

Fresh gains for the dollar, as investors continued to anticipate a scaling back of U.S. monetary stimulus, further weighed on prices.

“There is pressure ahead of USDA’s weekly report today. Corn crop conditions will probably jump substantially in key states and you’re probably going to get better good harvest progress in the wheat,” said Mike Zuzolo, president of Global Commodity Analytics.

“Beans have more uncertainty and they have the cash underneath them, underpinning them,” he said.

Cash soybean prices around the United States are near record early summer highs due to tight stocks of beans remaining from the drought-hit 2012 harvest. Lengthy delays for shipping soy from rival exporters in South America added further support as importers may tap the U.S. for near-term supplies.

A protest on one of the highways leading to Brazil’s port of Santos blocked the main corridor through which the country’s commodities reach international markets, a highway operator said Monday.

Crop conditions

The U.S. Department of Agriculture will release its weekly crop progress and condition reports after the market close on Monday.

Analysts on average expected soybean planting to be 93 per cent complete, which would be the slowest since 2009. The corn crop is already planted.

Warm to hot temperatures and adequate soil moisture reserves are boosting growth of the newly seeded U.S. corn and soybean crops, leading to prospects for good production in 2013, an agricultural meteorologist said.

“Overall it’s generally favorable for crops, the excessive wetness in the northwest should ease later this week and the rest of the crop belt has adequate moisture,” said Don Keeney, meteorologist for MDA Weather Services.

The condition of recently planted corn and soybean crops was expected to rise one point to 65 per cent good to excellent, a Reuters poll of analysts showed.

July corn futures on the Chicago Board of Trade fell 8-1/2 cents, or 1.3 per cent, to $6.53-1/4 per bushel. New-crop December corn shed 9-3/4 cents, or 1.7 per cent, to $5.46-1/2 a bushel, the lowest in a week.

CBOT July soybeans jumped 18-3/4 cents, or 1.3 per cent, to $15.12 a bushel while new-crop November settled unchanged at $12.73-1/2 a bushel after earlier falling to a four-week low.

CBOT July wheat fell 19 cents to $6.79 a bushel, a 2.7 per cent drop that was the steepest for a spot contract in at least six weeks.

Commodity funds sold a net 7,000 corn contracts and 6,000 wheat contracts on the day, but were buyers of a net 4,000 soybean contracts.

Grain markets are building up toward acreage and stocks reports to be issued by USDA on Friday, which will show the extent to which rain delays affected final corn and soybean planting.

Investors will be squaring positions ahead of the report, which falls on the last trading day of the week, month and quarter as well as the first notice day for July futures contracts.

— Karl Plume reports for Reuters from Chicago.

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