Chicago | Reuters — U.S. corn futures fell on Tuesday for the first time in four sessions on better-than-expected U.S. crop conditions and as crude oil prices, which fuelled the prior session’s rally, retreated.
Soybeans also declined, despite the announcement of more sales to top importer China, as forecasts for continued warm weather across much of the U.S. Midwest lessened concerns that the late-developing crop would be damaged by frost.
“Yesterday we got too enthused by energy prices moving up around the world. Today, with the relaxing of the energies, our petro-grain is back looking towards harvest,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.
Chicago Board of Trade December corn fell six cents to $3.68 a bushel and November soybeans were down 6-1/4 cents at $8.93-3/4 a bushel, with both surrendering all of their prior-session gains (all figures US$).
CBOT December wheat dropped 4-1/2 cents to $4.84-1/4 a bushel, following corn and soy lower.
Grain and soybean markets, which had risen sharply on Monday on surging crude oil prices after weekend attacks on Saudi Arabian oil installations, focused on forecasts for above-normal U.S. Midwest temperatures through the end of the month.
Corn and soybean crops have been lagging their normal pace of development after rain-delayed planting this spring, and the warm weather was seen boosting crop maturity.
The U.S. Department of Agriculture (USDA) on Monday said 55 per cent of U.S. corn was in good-to-excellent shape, above analyst expectations of 54 per cent. The harvest is also underway.
Soybean crop conditions slipped to 54 per cent good-to-excellent, in line with expectations.
Demand for the expected large soy crop remained a worry.
USDA on Tuesday said private exporters reported the sale of 260,000 tonnes of soybeans to China. It was the third daily soy sales announcement in a row involving the world’s top importer, with total sales reaching 720,000 tonnes.
But the sales announcement had been expected following deals for at least 600,000 tonnes last week, and U.S. soybean sales to China remain well behind normal.
“It is helpful, but it’s part of what we saw last week. We knew it was coming, now we just have it on paper,” said Brian Grossman, market strategist with Lakefront Futures + Options.
News that African swine fever was found in South Korea also rattled grain markets amid worries that a broader spread of the deadly disease could dent feed grain demand from the major importer.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Michael Hogan in Hamburg and Colin Packham in Sydney.