U.S. corn and soybean prices retreated for the second straight day on Thursday as forecasts for milder temperatures and slightly more rain across much of the Midwest lessened worries about crop damage.
Slight adjustments to weather forecasts have steered the grains markets recently. Corn has been jarred most because the crop will be pollinating in coming weeks, a critical development stage when severe heat and a lack of rain can hurt yields most.
Occasional showers and a lack of extreme heat were expected across much of the Corn Belt over the next two weeks. That is better for crops than a previous forecast for hot, dry weather, which had sent grain prices soaring.
“It’s turned wetter today, even wetter than yesterday which will certainly help, there’s definitely some improvement in the forecast seen for the next 10 days,” said Don Keeney, meteorologist for MDA Weather Services.
Strong corn export sales last week helped to offset some of the pressure in corn from the bearish weather forecast.
The U.S. Department of Agriculture said net corn sales in the week ended July 11 were more than 1.7 million tonnes for the current and new marketing years. Analysts had expected up to 1.6 million tonnes.
Unwinding of new-crop corn/soybean spreads also limited losses in corn, but put pressure in soybeans. The price ratio of December corn and November soybeans was 2.56-to-1 as of the close Wednesday.
“That’s the highest we’ve been since the fall of 2009 on my monthly continuation chart so we’re seeing some inter-commodity spread unwinding today. They’re buying back December corn shorts and selling out of their November beans,” said Mike Zuzolo, president of Global Commodity Analytics.
Chicago Board of Trade December corn fell 1-1/4 cents, or 0.3 percent, to $5.00-3/4 a bushel after earlier hitting a 10-day low of $4.94. It was the contract’s fourth decline in five sessions.
CBOT November soybeans dropped 17-3/4 cents, or 1.4 percent, to $12.65-3/4 per bushel. Technical selling developed as prices fell below the 50-day moving average around $12.68-1/2 to add pressure.
Wheat turned lower after early short-covering support faded, with prices pressured by harvesting progress of the winter crop and spillover from weaker corn and soybeans.
A large purchase of wheat from the Black Sea region by Egypt’s GASC, the country’s price-conscious state wheat buyer, at a steep discount to U.S. prices underscored the challenges that soft red winter wheat exports face in the world market.
“They bought all Black Sea wheat and it traded on a landed basis $40 a tonne cheaper than U.S. wheat,” said Roy Huckabay, analyst with the Linn Group.
Declines in hard red winter wheat futures were limited as Brazilian importers are expected to return for more of the variety following recent large purchases.
CBOT September soft red winter wheat dropped 4-1/2 cents, or 0.7 percent, to a 10-day low of $6.60-1/2 a bushel while September hard red winter wheat shed 1/2 cent to $7.02-1/4 a bushel.