(Nasdaq) – Improving weather forecasts and waning concern about summer growing conditions dragged grain and soybean futures prices to fresh lows on Wednesday.
Corn prices sank to a 21-month low as generous rains descended on the Midwest, with precipitation expected to continue through Friday and more wet weather in the offing in coming weeks. Better prospects for rainfall combined with a lack of extreme heat in the forecast for July fueled speculation that the nation’s corn crop will benefit from largely favorable weather during corn’s key pollination phase, which could help boost yields prior to the autumn harvest.
The specter of another year of large crops prompted commodity fund managers on Wednesday to continue liquidating long positions in corn and soybean markets, as forecasters called for rains to shrink areas of crop stress from one-third to just 10% to 15% of the Farm Belt.
Corn futures for delivery in July, the front month contract, slid 8 1/4 cents, or 2.4%, to $3.35 3/4 a bushel at the Chicago Board of Trade, the lowest closing price since Oct. 2014. Most-actively traded September futures dropped to $ 3.41 1/2 a bushel.
Soybean prices also succumbed to better weather forecasts despite federal data suggesting crop conditions have slipped somewhat. The U.S. Department of Agriculture on Tuesday said 70% of the domestic soybean crop was in good or excellent health as of Sunday, which is down two percentage points from a week earlier, but still higher than last year, when growers produced a record soybean crop.
Prices for the oilseeds also were pressured by renewed worries over prospects for global economic growth. While U.S. export demand for soybeans remains robust, Britain’s vote to leave the European Union has prompted concerns about the health of the global economy, and China’s decision to devalue its currency has fueled further unease regarding the world’s largest soybean buyer. “We’re seeing the second round of Brexit anxiety hitting global markets,” said Mr. Zuzolo.
CBOT July soybeans declined 10 3/4 cents, or 1%, to $11.06 1/4 a bushel, the lowest settlement price since Jun. 24. September contracts were down to $11.01 1/2 a bushel.
Wheat prices fell to a 10-year low, weighed down by good yield reports from farmers in the U.S. southern Plains and the eastern Midwest, where farmers are harvesting an abundant crop. Analysts said expectations for lower wheat production in the European Union, a key world growing region, were offset by speculation that Russia may soon lift export taxes on the grain, increasing competition on global markets.
CBOT July wheat shed 3 3/4 cents, or 0.9%, to $4.15 3/4 a bushel, the lowest closing price since Sept. 2006. September contracts were down to $4.28 1/2 a bushel.
