Chicago | Reuters — U.S. grain futures extended losses on Tuesday, with corn nearing a six-month low a day after the U.S. Department of Agriculture surpassed market expectations with projections for ample supplies.
At the Chicago Board of Trade, July corn settled down 1-1/2 cents at $4.22-3/4 per bushel, paring losses after falling to $4.16, a contract low and the lowest spot price since Jan. 10 (all figures US$).
New-crop November soybeans ended down 9-3/4 cents at $11.47-1/2 a bushel after dipping to $11.32, a 4-1/2 month low.
CBOT wheat followed along, with benchmark September finishing down five cents at $5.72-1/2 a bushel.
“The soy complex is seeing mild pressure after yesterday’s Black Monday brought on by a pair of bearish items from the USDA,” Citigroup futures specialist Sterling Smith said in a note to clients.
USDA on Monday estimated U.S. 2014 soybean plantings at a record 84.8 million acres, topping a range of expectations. USDA’s estimates of June 1 soy and corn stocks also came in above average trade estimates.
In addition, USDA’s weekly crop progress report showed U.S. corn condition ratings improved and soybean ratings were the highest in 20 years.
Weather in the Midwest looks promising, with no sign of stressful heat as the corn crop nears pollination, a crucial growth phase that typically takes place in July. But weather jitters may help underpin prices until the crop is farther along.
“The next item of risk for the corn is pollination and this is preventing further collapse,” Smith said, adding, “however, if this occurs without a hitch, our downside target of $3.80 may have to be adjusted lower.”
Frequent rains this season are seen by analysts as a net positive for crops. But run-off from heavy storms this week forced the closure of 11 locks on the upper Mississippi River, a key artery for shipping grain to the U.S. Gulf Coast.
“This will continue to slow barge shipments, but at present it appears that the market thinks that there is little overall impact on yield and production,” KCG Futures vice-president Helen Pound said in a client note.
Wheat fell amid ample world supplies and strong export competition. Egypt’s state grain buyer bought 240,000 tonnes of Romanian and Russian wheat at an international tender, bypassing offers of U.S. and French grain.
— Julie Ingwersen is a Reuters correspondent covering grain and oilseed futures markets from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Sybille de La Hamaide in Paris.