Chicago | Reuters — U.S. spot corn futures fell to a 3-1/2 month low on Monday as near-perfect crop weather in the U.S. Midwest raised expectations for record production, and China said it would halt import permits for a corn-based feed ingredient.
Wheat fell as the Northern Hemisphere harvest neared, while soybeans ended flat after falling to a one-month low.
At the Chicago Board of Trade, July corn settled down eight cents at $4.51 per bushel after hitting $4.45-1/2, the lowest spot price since Feb. 24 (all figures US$).
CBOT July wheat ended down 5-3/4 cents at $6.12-1/2 a bushel, while July soybeans settled unchanged at $14.57 a bushel.
Along with favourable weather, the corn market was hobbled by news that quarantine authorities in China had stopped issuing permits for the import of U.S. distillers dried grains (DDGs), a corn byproduct used in feed, due to the presence in some shipments of an unapproved genetically modified corn variety.
The news from China also pressured CBOT soymeal, which competes with DDGs for space in livestock feed rations.
“It’s the weather and DDGs,” Dan Basse, president of AgResource Co in Chicago, said of the weakness in CBOT corn.
“The weather is the predominant factor… We are looking for crop ratings to be record-high and we’re looking for the potential of a record crop and record yield,” Basse said.
After the CBOT close, the U.S. Department of Agriculture’s weekly crop report rated 75 per cent of the U.S. corn crop in good to excellent condition, down from 76 per cent a week earlier but still well above the five-year average of 68 per cent.
In its first U.S. soybean ratings of the season, USDA rated 74 per cent of the crop as good to excellent, topping an average of analyst estimates for 72 per cent. The crop was 87 per cent planted, above the five-year average of 81 per cent.
CBOT soybean futures closed mixed, with spot July unchanged after see-saw trade as weakness in soymeal and corn offset support from bargain buying.
CBOT wheat fell on seasonal harvest pressure and as U.S. exporters struggled to compete on the global market with cheaper grain from other origins. But CBOT July wheat held above last week’s multi-month low, underpinned by concerns about crop risks in the southern United States and Russia.
Losses were limited in K.C. hard red winter wheat by disappointing early yield reports, coupled with rumours of fresh demand for U.S. wheat from Brazil.
Early wheat yield reports from Texas and Oklahoma ranged from five to 25 bushels per acre, with most around 15 bushels per acre, according to a weekly harvest report released Friday by U.S. Wheat Associates. Last year, Oklahoma’s average winter wheat yield was 31 bushels per acre.
— Julie Ingwersen is a Reuters correspondent covering crop commodity markets from Chicago. Additional reporting for Reuters by Michael Hirtzer in Chicago, Naveen Thukral in Singapore and Sarah McFarlane in London.