Chicago | Reuters –– U.S. corn futures fell more than one per cent Wednesday on forecasts for better Midwest planting weather and news that the White House is considering an executive order on withdrawing from North American Free Trade Agreement, analysts said.
Soybeans also declined and wheat turned lower as corn sagged.
Chicago Board of Trade July corn settled down five cents at $3.66-3/4 per bushel (all figures US$). July soybeans ended down 8-1/2 cents at $9.56-1/2 and July wheat was down 1/2 cent at $4.26-1/2 a bushel.
Corn fell on forecasts that removed some of the rain expected in early May, easing fears of planting delays.
“It’s the weather that took us lower. The extended forecast beyond the middle of next week went drier and cooler,” said Dan Basse, president of Chicago-based AgResource Co.
Others cited jitters about U.S. corn exports to Mexico, a top buyer, after a senior Trump administration official said a draft executive order to withdraw the United States from NAFTA, a U.S., Mexico and Canada trade pact, is under consideration.
“The possibility of withdrawing from NAFTA is a very scary thing for corn, because we do a lot of export business for corn (to) Mexico,” said Ted Seifried, chief market strategist with the Zaner Group in Chicago. Mexico is one of the top three markets for U.S. farm production.
Soybeans faced additional pressure from weakness in Brazil’s currency, the real, which could prompt Brazilian farmers to sell more of their record-large soybean harvest.
Producers in the South American country have so far been reluctant to sell much of the crop. But a weaker real makes dollar-denominated soybeans worth more to Brazilian producers.
CBOT soyoil futures bucked the weaker trend, drawing support from a new legislative proposal to reinstate a tax credit on soy-based biodiesel fuel.
Wheat turned lower, following the declines in corn and soybeans. But the market was underpinned by worries about chilly weather expected in the southern Plains this weekend that could damage developing winter wheat.
“Colder conditions in the western Plains this weekend may result in some spotty damage to jointing wheat, mainly in far western Kansas, eastern Colorado, and far western Oklahoma,” MDA Weather Services said in a note to clients.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.