Grains, Soybeans Hit New Lows as Weather Beats Expectations

June 24th, 2016

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Category: Grains, Oilseeds

Currency-Article-Primary(NASDAQ) – CHICAGO–Futures prices for U.S. grain and soybean futures slid to fresh multiweek lows on Thursday, falling as better-than-expected weather continued to take steam out of worries that yield-sapping heat and dryness would harm crops this year.

Corn prices dropped to a six-week low as speculative investors closed out of bullish bets in the grain market, pushing prices lower as less threatening weather forecasts allayed fears that hot temperatures and dry soils would hamper the crop during its critical pollination phase. Corn pollination likely will begin next week, according to analysts, and near-term weather forecasts on Thursday called for ongoing showers and mostly normal temperatures in the Corn Belt.

“Right now there’s not a big [weather] threat out there,” said Christian Mayer, analyst at agricultural-advisory firm Northstar Commodity Investment Co., adding that while 40% of the corn crop was recently considered at risk, that figure has dropped to 20%. He said the corn market this week has seen a fundamental shift as “we went from a forecast that was going to stress the crop to one that’s not going to hurt it as much.”

Corn futures for July fell 5 3/4 cents, or 1.5%, to $3.87 1/4 a bushel at the Chicago Board of Trade, the lowest closing price since May 13.

Corn’s losses came despite better-than-expected weekly export sales. The U.S. Department of Agriculture on Thursday said net corn sales last week totaled 1.42 million metric tons for the 2015-16 and 2016-17 crop years. That figure topped analyst forecasts for 950,000 to 1.4 million tons.

Wheat prices also declined to a six-week low, weighed down by weakness in the corn market and the advancing wheat harvest, which is expected to heap more grain onto already burdensome U.S. supplies.

Crop “yields have been awfully good in southern Plains,” said Mr. Mayer.

CBOT July wheat declined 4 1/2 cents, or 1%, to $4.54 1/4 a bushel, the lowest closing price since May 11.

Soybean prices retreated to a three-week low, pressured by better Midwest weather and emerging concerns over demand. Analysts said private exporters are running behind on soybean shipments, and foreign buyers could potentially cancel earlier purchases of the crop, which would boost U.S. oilseed inventories.

CBOT July soybeans fell 13 cents, or 1.1%, to $11.24 1/2 a bushel, the lowest settlement price since Jun. 1.

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