Chicago | Reuters — Chicago Board of Trade corn futures sank by the daily limit on Tuesday as forecasts for cooler, wetter U.S. weather eased concerns about unfavourable crop conditions.
Prices pulled back after climbing 12 per cent last week on lower-than-anticipated U.S. plantings estimates from the Department of Agriculture. The estimates made the market more sensitive to dryness in northern and western portions of the U.S. crop belt.
It was difficult for agricultural futures to rally further with largely favourable Midwest weather seen into mid-July, said Rich Feltes, head of market insights for broker RJ O’Brien. The plantings estimates are being overshadowed by the potential for above-average yields across 75 per cent of the U.S. growing area, he said.
The favourable weather, if realized, will benefit the corn crop just as it passes through its key yield-determining stage of pollination.
USDA, in a weekly report, rated 64 per cent of the crop in good or excellent condition, unchanged from last week and in line with analysts’ expectations.
“There is little question over the wetter outlook for this week that is expected to provide beneficial rains to some of the driest areas of Iowa, Minnesota, and the Dakotas, while also reducing heat risks for the region,” said Arlan Suderman, chief commodities economist for broker StoneX.
CBOT corn futures dropped by the daily 40-cent limit through the May 2022 contract month, with the most-active December contract finishing at $5.39-3/4 a bushel (all figures US$).
November soybeans fell 94 cents to $13.05 a bushel. December soymeal lost $25.90, to $362.40 a ton, and December soyoil tumbled the 3.5-cent limit to 58.78 cents per lb.
Trading limits will temporarily expand for corn and the soy complex on Wednesday.
CBOT September wheat ended 26-3/4 cents lower at $6.26 a bushel.
USDA rated 16 per cent of U.S. spring wheat as being in good or excellent condition, down from 20 per cent a week ago and below analysts’ expectations.
— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.