GRAINS: U.S. corn futures hit lowest since oct 2010, pressured by weather

U.S. corn prices dipped to the lowest levels since October 2010 on Monday as forecasters predicted the crop in the U.S. Midwest would go through a key development phase in near-perfect weather conditions, traders said.

“We have moderated the temperature significantly, eliminating most of the stress (on the crop),” said Bill Gentry, a broker with Risk Management Commodities. “The reason for being long the market has kind of diminished. Now that we have the crop pollinated, you can take another notch of risk premium out.”

Soybeans were mixed, with the front-month contract bouncing on short-covering as it nears expiration. But deferred contracts were weak, with the Chicago Board of Trade new-crop November contract falling as the weather bolstered expectations for a bumper harvest.

“The weather outlook is unchanged from last week in that scattered showers and cooler temperatures are beneficial for most of the corn crop,” said Sterling Smith, futures specialist with Citigroup. “The crop needs a little more heat now, and temperatures are expected to rebound to more seasonal ranges.”

CBOT wheat futures edged higher, supported by a round of bargain buying following last week’s 2.1 per cent price drop to a more than three-week low.

CBOT September corn ended down 2-3/4 cents at $4.89-1/4 a bushel after bottoming out at $4.88-1/4 earlier in the session. The intraday low was the lowest price for front-month corn since $4.87-3/4 on Oct. 7, 2010.

The new-crop December contract extended its losing streak, falling 2-3/4 cents to $4.73-1/4 a bushel. December corn has fallen six days in a row and eight of the last nine sessions.

CBOT August soybeans were up 17-3/4 cents at $13.67-1/2 a bushel, while new-crop November was down 8-1/2 cents at $12.20 a bushel. The front-month contract hit its lowest since June 1, 2012, early on Monday.

CBOT September wheat was up 1-1/4 cents at $6.51-1/2 a bushel.

Dealers said wheat’s decline last week had been driven mainly by weakness in the corn market; they said wheat was oversold.

“In view of the much tighter market situation (in wheat compared with corn), we regard the wheat price slump as exaggerated,” Commerzbank said in a market note on Monday.

But weather remained the focus, and the benign conditions will likely weigh on corn and soybeans as the crop develops, said analysts.

“U.S. weather remains cool, and the presence of showers continues to support mostly favorable yield prospects,” said Luke Mathews, commodities strategist at Commonwealth Bank of Australia.

Analysts were expecting a U.S. Agriculture Department report on Monday afternoon to show that good-to-excellent ratings for corn fell 1 per centage point to 62 per cent. Soybean ratings were seen at 64 per cent good to excellent, unchanged from a week ago.

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