(Bloomberg) – Corn and soybeans rose in Chicago as investors weighed the outlook for bumper crops in the U.S., the top producer, against signs that demand may increase after prices fell to the lowest levels since 2010.
Corn slumped 21 percent in the past year and soybeans lost 10 percent as U.S. crops developed near the best condition in 20 years, U.S. Department of Agriculture data show. The agency predicts farmers will harvest the second-biggest corn crop ever and soybean production will be an all-time high. U.S. exporters sold 1.4 million metric tons of corn in the week-ended July 17, 34 percent more than a week earlier, while soybean sales more than quadrupled to 2.7 million tons, USDA data show.
“Grain markets have quickly priced in a larger-than-expected U.S. corn crop,” Australia & New Zealand Banking Group Ltd. analysts including Paul Deane wrote in a note. “Given the extent of the sell-off in the last month, we view grain prices as likely to stabilize near-term.”
Corn for December delivery rose 0.4 percent to $3.7325 a bushel at 7:10 a.m. on the Chicago Board of Trade. Prices retreated 1.8 percent last week, a fifth weekly decline. The grain dropped to $3.6425 on July 24, the lowest for a most-active contract since July 2010.
Soybeans for delivery in November increased 1 percent to $10.945 a bushel, rebounding from a 0.2 percent decline last week. The oilseed fell to $10.55 on July 23, the lowest since October 2010.
Seventy-six percent of corn in the main U.S. growing areas was in good or excellent condition as of July 20, according to the USDA, which is set to update its weekly crop progress report later today. The percentage matched a high set in 2004 that was the best crop condition rating since 1994. Soybeans were rated 73 percent in top shape, also the highest in 20 years.
Southwestern areas of the Midwest may see drier weather in the next 10 days, potentially contributing to “minor losses” for soybeans during the pod-setting phase, Commodity Weather Group said today in a report. Still, cool temperatures will limit yield declines and a return of rainfall in the 11-to-15-day forecast probably will “avert serious impacts,” according to the report.
Wheat for September delivery fell 0.8 percent to $5.3375 a bushel in Chicago, after posting a second weekly advance. In Paris, milling wheat for November delivery dropped 0.6 percent to 178.75 euros ($240.13) a ton on Euronext.
