Chicago | Reuters — U.S. corn futures fell to contract lows on Monday and soybeans slid to 3-1/2 month lows on crop-boosting weather and weak demand before short covering and technical buying helped both markets pare losses.
Spillover support from rising wheat futures also gave corn and soy some underlying support ahead of eagerly awaited U.S. Department of Agriculture (USDA) crop supply and demand data due later this week.
Weather forecasts pointed to warm temperatures in the U.S. Midwest farm belt along with some showers in the week ahead, which could boost yield prospects for corn and soybean crops that have been recovering from rain-delayed spring planting.
USDA is scheduled to update its U.S. corn and soybean crop forecasts in a monthly report on Thursday. The agency was criticized for its August forecast, which many farmers and traders said did not fully reflect early-season crop stress.
“The trade is looking for a cut of three bushels an acre in corn yields and a small reduction in soybean yields. You’re seeing some short-covering going into that report, anticipating USDA to make larger revisions than that,” said Brian Hoops, president of brokerage Midwest Market Solutions.
Forecasts for beneficial crop weather across much of the U.S. Midwest anchored prices.
“Increasing warmth through the end of September, as well as low frost/freeze risks continues for the core corn and soy production areas,” Refinitiv Agriculture Research analysts said.
“The latest satellite imagery points to overwhelmingly positive late-season conditions in most major agricultural areas.”
Chicago Board of Trade December corn fell to a contract low of $3.52-1/4 a bushel and ended down 1-1/4 cents at $3.54-1/4 (all figures US$). November soybeans were unchanged at $8.57-3/4 a bushel after earlier sinking as low as $8.51, the lowest since May 24.
After the close, USDA said 55 per cent of the U.S. corn crop was in good-to-excellent shape as of Sunday, down three points from a week earlier. The soybean rating held steady at 55 per cent.
Wheat futures rebounded from early lows on technical buying and short covering, and on concerns about Southern Hemisphere crops.
Dryness in western Argentina and eastern Australia has stoked worry about lower yields in the key export nations.
CBOT December wheat jumped 10-3/4 cents to $4.74-1/2 a bushel in the contract’s strongest gain in two months. Buying accelerated as the actively traded contract breached chart resistance at its 10- and 20-day moving averages and a down-trend line that traced the market’s nearly 20 per cent drop since late June.
— Reporting by Karl Plume in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.