U.S. grains: Corn, soy tumble to contract lows on record U.S. yield prospects

(Lisa Guenther photo)

Chicago | Reuters — U.S. corn tumbled to a four-year low while soybean futures fell one per cent on Wednesday after the government unexpectedly lifted condition ratings for the crops and analysts increased outlooks for what already were expected to be record-large harvests in the U.S.

Wheat futures also declined sharply, with prices extending losses after no U.S. supplies were offered in a tender to top global importer Egypt. A rising U.S. dollar was also bearish as international buyers can source cheaper grain from other shippers in the European Union and Black Sea region.

“We’re pricing in bigger crops before the next report,” said Global Commodities Analytics analyst Mike Zuzolo, referring to the U.S. Agriculture Department’s monthly supply and demand report due on Sept. 11.

In a report after the close of trading late on Tuesday, USDA increased so-called good-to-excellent ratings for the corn and soybean crops, surprising analysts, who had expected steady ratings.

Brokerages INTL FCStone and Allendale Inc. also boosted yield and production forecasts above the most recent USDA outlook.

Mild summer weather was a boon to the crops, Allendale analyst Rich Nelson told the Thomson Reuters Global Ag Forum. “Across the board, the numbers were impressive. This year’s pollination was one of the coolest of the past 30 years,” he said.

Most-active Chicago Board of Trade December corn was down 11-3/4 cents, or 3.2 per cent, at $3.52 per bushel, just above its contract low of $3.51-1/4 reached in the final seconds of the trading session (all figures US$). Corn on a continuous chart fell to $3.40-1/2 — the lowest level since June of 2010 — and posted the biggest daily declines in two months.

Benchmark November soybeans eased 12 cents to $10.20, trimming losses after earlier falling to a contract low of $10.12-1/2.

CBOT wheat for December delivery was 19-1/4 cents, or 3.5 per cent lower, at $5.35-3/4, near its earlier contract low of $5.35. On a continuous chart, wheat declined for the third straight session for the worst streak of declines since April 2013.

The main buying agency for top wheat buyer Egypt announced that it bought two cargos of wheat: one from France and one from Romania. No U.S. wheat was offered with freight costs making supplies from the U.S. uncompetitive to many top buyers of the grain in Africa and the Middle East.

“Wheat demand is not showing up and the market is seeking new lows to find demand,” Zuzolo said.

— Michael Hirtzer reports on agriculture and ag futures markets for Reuters from Chicago. Additional reporting for Reuters by Nigel Hunt in London and Naveen Thukral in Singapore.

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