Chicago | Reuters — U.S. corn futures fell by almost four per cent on Monday on forecasts for improving crop weather in the Midwest, including cooler temperatures and beneficial rains late this week, analysts said.
Soybeans fell more than two per cent and wheat followed the weaker trend as the U.S. winter wheat harvest got under way.
Chicago Board of Trade (CBOT) July corn futures settled down 25-1/4 cents, or 3.7 per cent, at $6.59-1/4 per bushel, while new-crop December corn ended down 28-1/2 cents at $5.81-1/4 (all figures US$).
CBOT July soybeans ended down 36-1/4 cents, or 2.4 per cent, at $14.72-1/4 a bushel while July wheat fell 6-1/4 cents to finish at $6.74-1/2 a bushel.
“The ags sold off with gusto overnight after weekend weather models flipped cooler and wetter for many key crop production areas of the United States,” Arlan Suderman, StoneX chief commodities economist, wrote in a note to clients.
Some analysts saw Monday’s declines in grains as follow-through selling, after weak closes on Friday in CBOT corn and soyoil futures. Commodity funds hold sizeable net long positions in both commodities, leaving the markets vulnerable to bouts of long liquidation.
However, even with improved weather forecasts, concerns persist about dryness in portions of the Corn Belt. After the CBOT close, the U.S. Department of Agriculture lowered its ratings of the U.S. corn and soybean crops more than most analysts expected.
In a weekly progress report, USDA rated 68 per cent of the U.S. corn crop as good to excellent, down four percentage points from the previous week, and 62 per cent of the soy crop as good to excellent, down five percentage points. Analysts on average had expected a ratings decline of only three points for corn and two points for soybeans.
“Early planted crops are starting to show moisture stress,” Iowa Secretary of Agriculture Mike Naig said in a statement. Iowa is the top U.S. corn state and the No. 2 producer of soybeans.
Traders continued to digest a Reuters report on Friday that said the United States could scale down biofuel blending in fossil fuels, possibly cutting demand for corn-based ethanol and soy-based biodiesel.
CBOT July soyoil settled down fell 1.5 per cent and Malaysian palm oil fell nearly eight per cent on Monday.
— Reporting for Reuters by Julie Ingwersen; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.