(NASDAQ) – Grain and soybean futures tumbled Monday as mostly favorable Midwest weather forecasts spurred expectations that U.S. farmers will harvest bumper crops this autumn.
Soybean futures dropped, erasing gains in the previous session as forecasts improve, easing fears that adverse August weather will curb yields of the crop. Although several days of hot weather are expected to set in across the U.S. Farm Belt this week, cooler temperatures are predicted to bring relief in six to 10 days, and scattered showers will also water crops over the next couple of weeks, aiding soybeans in their most critical month for development.
“Long-range models now indicate little stress for the crops through mid-August,” said Karl Setzer, of brokerage MaxYield Cooperative.
Soybean futures for delivery in August dropped 36 1/2 cents, or 3.5%, to $9.96 a bushel at the Chicago Board of Trade. The U.S. Department of Agriculture in July projected U.S. growers would harvest the third-largest crop in history.
Prices for the oilseeds also sank as traders liquidated bets on rising prices and speculation grew that exports to China, the world’s largest soybean buyer, could slow.
Meanwhile, corn prices fell to a 22-month low, pressured by expectations that farmers will produce a record crop this year due to benevolent weather. Hot temperature in the offing mostly pose a threat to soybean yields, as corn’s critical pollination and kernel-filling phases are largely complete. A record U.S. corn crop would heap grain upon already abundant domestic and global supplies, analysts said.
“Weather is bearish and there just isn’t much reason for the market to rally right now,” said Doug Bergman of RCM Asset Management.
CBOT September corn fell 8 3/4 cents, or 2.6%, to $3.25 3/4 a bushel, the lowest closing price since October 2014.
Wheat prices slid to a fresh 10-year low, pressured by ample world supplies of the grain. Although rain-reduced crops in France, a major wheat-grower, had recently helped buoy the market, prices have declined for the past five sessions as large crops elsewhere promise to make up for shortfalls in Europe.
CBOT September wheat shed 1 3/4 cents, or 0.4%, to $4.06 a bushel, the lowest closing price since Sept. 2006.
