U.S. corn eases for 2nd day as rains boost crop outlook

September 2nd, 2014

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Category: Grains, Oilseeds

(Reuters) – Chicago corn futures lost more ground on Tuesday while soybeans were largely unchanged after dropping in the last session, with pressure from rains across the U.S. Midwest renewing hopes of record yields.

Wheat fell for a second day as rains are expected to provide moisture to the soil ahead of the winter crop planting in the United States.

Chicago Board of Trade December corn dropped 0.4 percent to $3.63-1/4 a bushel by 0256 GMT and the front-month contract lost 0.3 percent to 3.57-3/4 a bushel, adding to Friday’s decline of 0.8 percent.

December wheat fell 0.3 percent to $5.62 a bushel, after closing down 1.4 percent on Friday and November soybeans were unchanged at $10.24-1/4 a bushel, having slid 0.4 percent in the last session.

U.S. markets were closed on Monday for the Labor Day holiday.

“Rains are positive for soybean yields,” said Paul Deane, agricultural commodity strategist at ANZ in Melbourne. “People are just waiting for crops to arrive, I can’t see the market doing much, prices are going to stabilise here.”

Rains across key growing regions in the United States are helping crop development,broadly pressuring grain and oilseed prices.

Large speculators switched to a net short position in CBOT corn futures in the week to Aug. 26, regulatory data released on Friday showed.

The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and increased their net short position in soybeans.

The U.S. weather outlook is also weighing on wheat futures as farmers prepare for seeding of the winter crop.

The pressure on wheat market comes despite rising tensions between Russia and Ukraine, two of the world’s key grain suppliers.

Ukrainian President Petro Poroshenko accused Russia on Monday of “direct and undisguised aggression” which he said had radically changed the battlefield balance as Kiev’s forces suffered a further reverse in their war with pro-Moscow separatists.

“If the wheat market had any scope of rallying it would have been with the headlines from Russia and Ukraine over the last four or five days,” said ANZ’s Deane.

The International Grains Council raised its forecast of 2014/15 world wheat production to 713 million tonnes, from 702 million previously, and boosted its outlook for corn by 4 million tonnes to 973 million.

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