Chicago Corn Futures Fall to Lowest Since March; Soybeans Drop

By Luzi Ann Javier and Jae Hur

July 6 (Bloomberg) -- Corn futures fell to the lowest in four months in Chicago as favorable weather in the U.S., the world’s biggest grower and exporter of the crop, improved the outlook for yields. Soybeans also declined.

Sixteen of 23 traders and analysts surveyed by Bloomberg on July 2 said corn will fall this week, while 13 of 24 respondents forecast a decline in soybeans, on speculation warm weather and near-normal rainfall forecast for the Midwest, the largest U.S. growing region, will help crop development. The Lower Midwest will have warm weather this week, after cool temperatures over the weekend, Accuweather.com said on its Web site yesterday.

“We’re seeing some of the yield risk premium perhaps coming out of the market,” Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney, said by phone today. “Some of the concerns we had earlier in corn, which came from the delayed planting, are starting to disappear.”

Corn for December delivery slumped as much as 2.9 percent to $3.47 a bushel, the lowest since March 4, in electronic trading on the Chicago Board of Trade and was at $3.50 at 2:11 p.m. Singapore time.

Soybeans for November delivery, after the U.S. harvest, fell as much as 2.5 percent to $9.81 a bushel in Chicago, before trading at $9.895 a bushel.

In India, the world’s fourth-largest soybean meal exporter, the annual monsoon covered the entire country 12 days before the normal date, helping farmers sow corn, oilseeds and rice, according to a July 3 report by the India Meteorological Department. Below-average rains in June had delayed planting.

Monsoon Rains

Monsoon rains, the main source of irrigation water for the nation’s 235 million farmers, normally cover the entire country by July 15, the department said on its Web site.

Soybean meal for December delivery, the most-active contract on the Chicago Board of Trade, lost as much as 2.4 percent to $307.20 per 2,000 pounds, before trading at $310.40.

Wheat for September delivery lost as much as 0.6 percent to $5.26 a bushel and last traded at $5.2775 a bushel.

Western Australia, the nation’s biggest grain-growing region, may produce less grain from the current crop than a year earlier, in part as dry weather stymies yield potential.

Output of all grains may be 10 million tons to 12 million tons, the state’s Department of Agriculture and Food said today in a report on its Web site. Production from the previous harvest was 13.6 million tons, according to data from the Australian Bureau of Agricultural and Resource Economics.

Wheat is the state’s biggest crop. Grain growers in Australia, the world’s fourth-largest wheat exporter, harvest their current crops starting from about November.

To contact the reporters on this story: Luzi Ann Javier in Manila javier@bloomberg.net; Jae Hur in Singapore at jhur1@bloomberg.net