Chicago | Reuters — U.S. corn futures fell more than two per cent on Monday, nearing a two-week low as Midwest weather forecasts turned milder for the crop’s key growth phase this month, raising the potential for a large harvest, analysts said.
The rosy weather outlook also pushed soybean futures lower, and wheat followed the weak trend.
“Risk premium is coming out of the market due to improved weather conditions … and we have huge (old-crop) supplies we are lugging around,” said Don Roose, president of Iowa-based U.S. Commodities.
Most-active December corn futures on the Chicago Board of Trade settled down 8-1/4 cents at $3.36-1/2 per bushel after dipping to $3.34-3/4, the contract’s lowest since June 30 (all figures US$). Benchmark CBOT November soybeans ended down 15-1/2 cents at $8.75-1/4 a bushel.
Weather forecasts looked cooler and wetter for the balance of July, when crops are pollinating in the heart of the Midwest. Corn and soy futures had climbed earlier this month as hot, dry conditions stressed crops in some areas.
After the CBOT close, the U.S. Department of Agriculture rated 69 per cent of the country’s corn crop in good-to-excellent condition, down two percentage points from a week earlier. Analysts surveyed by Reuters on average had expected a smaller decline of one percentage point.
USDA rated 68 per cent of the soybean crop as good to excellent, down from 71 per cent last week.
Rising trade tensions with top global soy buyer China added to bearish sentiment, even after China booked 1.365 million tonnes of U.S. corn last week, its second-largest single-day U.S. corn purchase on record.
White House economic adviser Larry Kudlow said President Donald Trump was “not in a good mood” about China because of the coronavirus pandemic and other issues. But Kudlow said the United States was still engaged in the first phase of a massive trade deal with the Asian country.
CBOT September wheat settled down 9-1/4 cents at $5.24-3/4 a bushel as traders continued to monitor Northern Hemisphere harvests.
Agriculture consultancy IKAR lowered its forecast for Russia’s wheat crop to 76.5 million tonnes from 78 million previously.
After the CBOT close, Egypt’s General Authority for Supply Commodities set an international wheat purchase tender. Results were expected on Tuesday.
— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.