Corn Drops to One-Week Low as Rains Boost Outlook for U.S. Crop

(Businessweek) – Corn declined for a second day to the lowest level in more than a week on a forecast for rains in the U.S. Midwest, helping ease concern that crop stress will hurt a record harvest in the world’s largest grower and exporter.

The contract for delivery in December fell as much as 1.4 percent to $4.95 a bushel, the lowest price since July 8. Futures were at $4.975 by 10:12 a.m. in Singapore on volume that was 88 percent above the 100-day average for that time of day.

A storm will move through the Corn Belt in the middle of next week, helping ensure rainfall will be near normal in most areas, Accuweather.com said yesterday. Conditions had deteriorated as dry weather persisted, with the share of the crop that’s rated good-to-excellent dropping to 66 percent as of July 14 from 68 percent a week earlier, government data show.

“There’s certainly been a potential improvement in forecasts over the last 24 hours, particularly in the drier parts of the U.S. western Corn Belt,” Michael Pitts, a commodity sales director at National Australia Bank Ltd., said by phone from Sydney today. “If that comes to a fruition, and we don’t get any heat, then that should push us most of the way through the most dangerous part of the corn season.”

About 16 percent of corn was at the silking stage as of July 14, behind a five-year average of 35 percent, the U.S. Department of Agriculture said July 15. Silking is part of the pollination stage when drought and high temperatures can hurt yields, according to the Ohio State University Extension website. Futures slid 29 percent this year as U.S. farmers planted a record crop, estimated by the USDA at 13.95 billion bushels.

Soybeans for November delivery lost as much as 1.3 percent to $12.6625 a bushel before trading at $12.7575. Wheat for delivery in September slipped 0.2 percent to $6.6375 a bushel.