Reuters — Chicago corn futures fell on Monday after two straight days of gains while soybeans slid to a contract low on forecasts of record crops in the U.S.
Wheat also weakened on profit-taking as the focus returned to large global crops.
Chicago Board of Trade new-crop December corn fell 1.1 per cent or four cents to $3.67-1/2 a bushel (all figures US$).
“That’s a reflection of the crop and the weather,” said Terry Linn of the Linn Group, a Chicago brokerage. “The rains over the weekend were substantial and fell in all the right places, and they are very bearish.”
The fact funds hold long positions in corn as the crop rounds into shape has also led to some selling, said Karl Setzer, market analyst at MaxYield Cooperative in West Bend, Iowa.
New-crop November soybeans dropped 1.2 per cent or 12-3/4 cents to $10.29-1/4 a bushel after hitting a contract low earlier in the session. December wheat fell 1.4 per cent or 7-3/4 cents to $5.54-1/2 a bushel.
“We see lower prices for corn, soybeans and even wheat largely driven by fundamentals,” said Phin Ziebell, agribusiness economist at the National Australia Bank.
Traders awaited the U.S. Agriculture Department’s (USDA) weekly crop condition ratings at 3 p.m. CT. A Reuters poll showed the industry expected corn and soybean ratings to be unchanged from a week earlier.
Farm advisory service Pro Farmer on Friday forecast the U.S. 2014 corn crop at a record 14.093 billion bushels after completing its crop tour of U.S. grain belts.
USDA last week estimated the crop at a record high of 14.032 billion bushels.
The Pro Farmer tour results fuelled expectations among analysts that USDA will soon raise its U.S. corn yield forecast.
Corn and soybeans typically come under selling pressure around this time of year when traders determine the crop’s size, Setzer said.
“A lot of guys are (thinking) the crop is made, which isn’t 100 per cent accurate,” he said. “There is still some time for yield loss. But yields are projected so high, especially in corn, that even if we take off a bushel or two, it really wouldn’t affect the balance sheets all that much.”
Pro Farmer forecast U.S. soybean production at 3.812 billion bushels, with an average yield of 45.35 bushels per acre. Last week, USDA put the crop at an all-time high of 3.816 billion bushels, with a yield of 45.4 bushels per acre.
Nearby September soybeans gave up earlier gains, which were due to dwindling supplies of last year’s crop, and plunged 3.5 per cent.
“Obviously it’s a very volatile contract,” Linn said. “We could just as easily be right back up tomorrow.”
The market focus for wheat on Monday was moving from the conflict between Russia and Ukraine to the ample global wheat supply outlook, analysts said.
The market eyed, however, wet weather in the U.S. northern Plains that has threatened the quality of the spring wheat crop.
— Rod Nickel and Julie Ingwersen write for Reuters from Winnipeg and Chicago respectively. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.