U.S. grains: Corn hits contract lows on good weather ahead of holiday

(Lisa Guenther photo)

Chicago | Reuters — U.S. corn futures fell to contract lows on Wednesday as optimal weather in the heart of the Corn Belt boosted prospects for a bumper harvest this autumn, traders said.

Soybean futures also fell while wheat firmed on bargain buying after falling to a 4-1/2 month low this week. Traders appeared to be adjusting positions ahead of the U.S. Independence Day holiday on Friday.

At the Chicago Board of Trade, September corn settled down 3-3/4 cents at $4.12-1/4 per bushel (all figures US$).

August soybeans ended down 13 cents at $13.14-3/4 per bushel. September wheat settled up three cents at $5.75-1/2 a bushel.

In corn, the benchmark December contract, representing the 2014 U.S. harvest, fell 4-3/4 cents at $4.18 after setting a contract low at $4.16-1/4.

The slide reflects the declining risk of a weather problem as the U.S. corn crop nears pollination, a crucial phase for determining yield. The bulk of the crop normally pollinates in mid-July.

“The weather forecast remains largely unchanged, which promotes fantastic development of corn and beans across the Midwest,” said Terry Reilly, grains analyst with Futures International in Chicago.

Heavy rains have fallen across the region in recent weeks, and there was no sign of a shift to stressful hot and dry weather. “Over the two-week period, it doesn’t seem like we have any problems out there,” Reilly said.

Expectations China may end its corn stockpiling program as it struggles with massive state reserves added pressure.

Soybeans followed corn lower, declining for a fourth straight session as commodity funds liquidated long positions in both products following bearish stocks and acreage reports from the U.S. Department of Agriculture.

USDA on Monday estimated U.S. 2014 soybean plantings at a record 84.8 million acres, exceeding market expectations. USDA estimates of June 1 soy and corn stocks also came in above average trade estimates.

CBOT wheat firmed, but K.C. hard red winter and MGEX spring wheat futures fell on fund liquidation. Commodity funds hold a net long in the two smaller markets but are net short in CBOT wheat.

K.C. wheat was also pressured by expectations that USDA might raise its estimate of U.S. 2013-14 hard red winter wheat ending stocks in a monthly supply/demand report next week, given state figures in Monday’s June stocks report.

— Julie Ingwersen is a Reuters correspondent covering grain and oilseed futures markets from Chicago. Additional reporting for Reuters by Michael Hogan and Naveen Thukral.

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