Corn Declines as U.S. Crop Improves After Rains; Soybeans Drop

By Jae Hur

Aug. 12 (Bloomberg) -- Corn dropped as the U.S. crop's condition improved last week after beneficial rains fell in parts of the Midwest, raising production prospects. Soybeans and wheat also declined.

About 67 percent of the corn crop was rated good or excellent as of Aug. 10, compared with 66 percent a week earlier and 56 percent a year earlier, the U.S. Department of Agriculture said yesterday in a report. About 63 percent of the soybeans got the top ratings, the same as a week earlier while up from 56 percent a year earlier, the USDA said.

``Crop conditions were better than expected,'' Hiroyuki Kikukawa, general manager of research at IDO Securities Co., said today from Tokyo. ``We expect the U.S. government to raise its estimate for corn production later today.''

Corn for December delivery was down 4.25 cents, or 0.8 percent, at $5.1275 a bushel in after-hours electronic trading on the Chicago Board of Trade at 10:35 a.m. Singapore time. Most- active futures have fallen 36 percent since reaching a record $7.9925 on June 27.

Soybeans for November delivery fell 10.75 cents, or 0.9 percent, to $11.8525 a bushel. The most-active contract is down 27 percent from the all-time high of $16.3675 on July 3.

The U.S. Department of Agriculture will today project a corn crop of 11.939 billion bushels, according to the average estimate of 23 analysts surveyed by Bloomberg News. That's up 1.9 percent from the USDA's July estimate of 11.715 bushels.

Crop Forecast

The government may also project a soybean crop of 2.993 billion bushels, the average estimate of 23 analysts surveyed by Bloomberg News. That's down 0.2 percent from a July forecast of 3 billion bushels.

Corn dipped yesterday to $5.12, the lowest since March 20, and soybeans touched $11.68, the lowest since April 1, as the dollar surged, eroding the appeal of commodities as an alternative investment.

The dollar traded at a 5 1/2-month high today against the euro and was also close to a seven-month high against the yen as crude oil traded near a 14-week low, copper fell to the weakest in six months and gold to the cheapest since December.

Wheat for December delivery was down 3.5 cents, or 0.4 percent, at $8.15 a bushel as of 10:35 a.m. Singapore time after gaining 3.6 percent yesterday. The most-active futures have dropped 40 percent since reaching a record $13.495 on Feb. 27.

To contact the reporter on this story: Jae Hur in Singapore at jhur1@bloomberg.net