Chicago | Reuters — U.S. corn prices fell more than two per cent Monday on expectations the government will raise its production forecasts to record highs this week and that a possible frost in the upper Midwest will cause only minor damage.
“We are in downtrends for everything,” said Robert Bresnahan of Trilateral Inc. “Last Friday we rallied on some concept of frost, and they walked that back a little bit, so it’s not as cold,” he said.
At the Chicago Board of Trade, bellwether December corn settled down 7-3/4 cents at $3.48-1/4 per bushel, but held above its contract low set last week at $3.43-3/4 (all figures US$).
November soybeans ended down 13 cents at $10.08-1/2 a bushel and December wheat fell 1-3/4 cents at $5.33-1/2 a bushel.
Joel Widenor of the Commodity Weather Group said in the Reuters Global Ags Forum that he expected only “spotty” frost in the eastern Dakotas on Friday morning and early Saturday in eastern Minnesota, Wisconsin and far northeast Iowa.
“We still think (there is) very little chance of a damaging hard freeze,” Widenor said, referring to readings at or below -2 C that could halt crop development and reduce yield potential.
Reports of harvest getting under way in the southern Midwest also pressed the market, with cash merchandisers reporting corn yields of 220 to 250 bushels per acre in central Illinois. Soybean yield reports out of the Mississippi River Delta and the southern Midwest have also been strong.
Ahead of updated monthly crop forecasts due from the U.S. Agriculture Department on Thursday, analysts surveyed by Reuters expect the government to raise its already record-high yield forecasts of 167.4 bu./ac. for corn and 45.4 for soybeans.
In its weekly crop progress report released after the CBOT close, the USDA rated 74 per cent of the U.S. corn crop and 72 per cent of the soybean crop as good to excellent, unchanged from the previous week and the highest ratings for early September in 20 years.
CBOT wheat futures fell in sympathy with corn and soybeans but pared its losses toward the closing bell. Wheat was pressured in part by strength in the U.S. dollar, which makes dollar-denominated grains less attractive on the world market.
— Julie Ingwersen is a Reuters correspondent covering grain markets in Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.