(NASDAQ) – Grain and soybean prices slid Monday as the U.S. dollar firmed and traders looked ahead to a monthly crop report expected to show swelling corn and wheat supplies.
Corn prices dropped for the seventh out of eight straight sessions, weighed down in part by expectations that federal forecasters in an upcoming crop report on Tuesday will boost their estimate for U.S. corn production this year while projecting bigger domestic stockpiles of the grain. In a monthly supply-and-demand report, the U.S. Department of Agriculture is expected to estimate that growers will harvest a record corn crop this year thanks partly to greater- than-expected plantings of the crop. Meanwhile, analysts anticipate the USDA will raise its estimates for 2015-16 and 2016-17 corn inventories, calling for supplies to total more than two billion bushels in the coming season.
However, forecasts for hot, dry weather in the Midwest during the latter half of July capped losses in the corn market. July is a key month for corn’s development and heat and dryness could hamper crop yields prior to the fall harvest.
“The weather remains the wild card,” said analysts at ED&F Man Capital Markets in an afternoon note to clients.
Corn futures for delivery in September fell 6 3/4 cents, or 1.9%, to $3.48 1/4 a bushel at the Chicago Board of Trade. Lightly traded July contracts declined to $3.43 3/4 a bushel.
Wheat prices also slid, pressured by a higher dollar and the progressing U.S. harvest. Expectations that the USDA will increase its outlook for U.S. production during the 2016-17 season as well as domestic stockpiles also weighed on the market. Farmers in recent weeks have been reporting strong yields from the wheat harvest in the U.S. southern Plains, fueling concerns over an oversupply of the grain.
CBOT September wheat, the most actively traded contract, dropped 4 1/2 cents, or 1%, to $4.30 1/2 a bushel. Lightly traded July contracts slid to $4.16 1/4 a bushel. Prices for wheat last week fell to a 10-year low.
Soybean prices succumbed to strength in the dollar and weakness in corn and wheat markets after advancing earlier in the day. Prices for the oilseeds had gained as forecasts for hot, dry weather in coming weeks sparked concern over potential damage to the soybean crop, which could suffer if adverse weather continues into August, the most critical period for determining yields.
Earlier in the day, soybean prices rose as commodity fund managers continued to “build risk premium back into the soybean market as extended weather outlooks shift warmer and drier,” said Arlan Suderman, chief commodities economist for brokerage INTL FCStone.
CBOT August soybeans, the most actively traded contract, lowered by 6 1/4 cents, or 0.6%, to $10.77 a bushel. Lightly traded July contracts dropped to $10.82 3/4 a bushel.
