Corn fell the most in more than four months and soybeans declined to the lowest in seven weeks on speculation that rain will improve prospects for newly planted crops in the U.S., the world’s biggest producer and exporter.
As much as 3 inches (7.6 centimeters) of rain forecast from May 23 to May 24 will boost soil moisture from South Dakota to Iowa before moving east into Illinois and Wisconsin, Global Weather Monitoring said in a report today. A second storm will reach the Midwest beginning May 28. About 77 percent of U.S. corn was in good or excellent condition on May 20, the highest since 2007, the government said.
“The market is focused on the weather, and timely rains the next three weeks will quickly boost the odds in favor of a big corn harvest,” Chad Henderson, a market analyst for Prime Agricultural Consultants Inc. in Brookfield, Wisconsin, said in a telephone interview. “These wetter forecasts are keeping pressure on the markets today.”
Corn futures for July delivery plunged 5.7 percent to close at $5.97 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest drop since Jan. 12. Last week, the most-active contract jumped 9.4 percent on speculation that hot, dry weather will threaten U.S. production. Corn for December delivery, after the harvest, retreated 3.4 percent to $5.22.
Soybean futures for July delivery dropped 2.1 percent to $13.8225 a bushel in Chicago, after touching $13.75, the lowest since March 30. The contract for delivery in November, after the harvest, slid 1.8 percent to $12.8225.
Prices also fell on slowing Chinese demand for U.S. supplies, said Mike Zuzolo, the president of Global Commodity Analytics & Consulting. There were no overnight sales announcements from the U.S. Department of Agriculture. Yesterday, the department said corn inspected for export in the week ended May 17 fell 16 percent to 23.26 million bushels, the lowest since January.
The premium paid for corn delivered to export terminals near New Orleans fell 9 cents to an average of 78 cents over July futures from 87 cents yesterday, USDA data show. Soybean premiums fell 3 cents to 54 cents over July futures, the third straight decline.
Pork prices in China, the biggest hog producer and top importer of soybeans, fell 1 percent last week, the 16th straight decline, Xinhua news agency reported today, citing Ministry of Commerce data. Corn is used in livestock feed.
“The trade expects that China is not going to be the demand base for agricultural imports that they have been the last 18 months,” Zuzolo said in a telephone interview. “Trading funds are liquidating long positions in the grain markets.”
Corn is the biggest U.S. crop, valued at $66.7 billion in 2010, followed by soybeans at $38.9 billion, USDA data show.
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