Corn, Soybeans Decline as Rain Eases U.S. Harvest Concerns

Businessweek.com
July 20 (Bloomberg) -- Corn fell, extending the biggest loss in seven weeks, and soybeans declined as a forecast for rain in parts of the U.S. eased concern about yield losses on dry weather in the world’s largest grower of both crops.


December-delivery declined as much as 1.1 percent to $3.895 a bushel on the Chicago Board of Trade and was at $3.92 a bushel at 10:34 a.m. Singapore time.

“The driest corn and soybeans in central Illinois are experiencing substantial rainfall,” T-Storm Weather LLC in Chicago said in a report. Rains may also spread across the drier areas of Indiana, Ohio and Michigan, it said.

Prices were “weighed down by forecasts of rain for U.S. crops and expectations of excellent U.S. crop conditions,” Commonwealth Bank of Australia said in a report e-mailed today.

Illinois and three other states accounted for 30 percent of the nation’s last harvest of both crops, according to January report of the U.S. Department of Agriculture.

About 72 percent of the U.S. corn crop was in good to excellent conditions as of July 18, compared with 73 percent a week earlier and 71 percent a year ago, the USDA said yesterday.

Sixty-seven percent of the soybean crop was rated good to excellent up from 65 percent a week earlier, it said.

Soybeans for November-delivery were little changed at $9.7075 a bushel in Chicago at 10:33 a.m. Singapore time, after losing as much as 0.4 percent earlier.

Wheat Falls

September delivery wheat fell 0.7 percent to $5.78 a bushel in Chicago. Wheat’s 14-day relative strength index, a gauge whether a commodity is overbought or oversold, has been above 70 since July 6, a level some traders use as a signal that prices are poised to decline.

“Steep losses in corn prices and a correction from a recent rally weighed on prices,” Commonwealth Bank said. Still, the bank said news remains mostly supportive” of prices, including the expanding drought in Russia and Kazakhstan and exports from the U.S.

Russia, the world’s third-largest wheat grower in the 2009-2010 season may reduce export of grains should crop losses caused by drought deepen, the nation’s Grain Union President Arkady Zlochevsky told reporters yesterday.

Rain in Canada last week added to excessive soil moisture in the nation’s main growing regions, the Canadian Wheat Board said. Canada was ranked the second-largest wheat exporter in the 2009-2010 season by the USDA.

The areas seeded with wheat fell 7.1 percent to 22.7 million acres from a year earlier as wet weather kept farmers out of fields, Statistics Canada said in June. The next survey due in August may show flooding caused further cuts, it said.

Wheat for export inspected at U.S. ports rose 57 percent to 22.449 million bushels in the week ended July 15, from a week earlier, the USDA said yesterday.