July 9 (Bloomberg) -- Corn fell for the fourth straight session as favorable weather helped plants in the U.S. Midwest recover from the worst flooding in 15 years.

About 95 percent of the region will benefit from warm, wet weather the next two weeks, boosting yield potential, said Fred Gesser, senior meteorologist for Planalytics Inc. in Wayne, Pennsylvania. About 62 percent of the corn was in good or excellent condition as of July 6, compared with 59 percent on June 29, the government said this week.

``Good growing weather will encourage further liquidation'' of speculative bets on higher prices, said Greg Grow, director of agribusiness for Archer Financial Services in Chicago. ``The crop is showing excellent growth and potential, which will offset some of the losses from flooding last month.''

Corn futures for December delivery fell 9.75 cents, or 1.4 percent, to $7.1275 a bushel on the Chicago Board of Trade. The price has fallen 11 percent from a record $7.9925 on June 27.

Futures still have doubled in the past year as the Department of Agriculture forecasts global reserves will fall to a 24-year low before the start of the U.S. harvest.

Crop conditions improved in eight of the top 18 producing states last week, including Iowa, Illinois, Nebraska and Minnesota, the four biggest growers, the USDA said on July 7.

More Planted

About 87.3 million acres were planted, 1.9 percent more than farmers indicated they would sow in a March survey, the USDA said last week. The area planted is the second-highest since 1944, behind 93.6 million acres last year.

Sunshine and an absence of excessive heat have been ``nearly ideal for corn growth'' in the past two weeks, said Emerson Nafziger, an agronomist at the University of Illinois in Chicago. Corn plants in Illinois are dark green and growing as much as 3 inches a day as their roots drive down into the soil for nutrients, he said.

``There is pretty good reason for optimism about corn yield,'' compared with a few weeks ago, when plants were stunted by cold, wet conditions, Nafziger said. ``It's not impossible for state yields to match last year and for better yields than last year in some areas.''

Selling by speculators and investors increased yesterday after December futures opened below the prior session's low and the 20-day moving average, John Roach, president of Roach Ag Marketing Ltd, in Boca Raton, Florida, said in a report.

Speculators Holdings

Hedge funds and other large speculators cut net-long positions in corn futures by 3.2 percent, or 10,782 contracts, to 328,947 contracts in the week ended July 1, data from the Commodity Futures Trading Commission show. Large speculators held record net-long positions of 379,263 contracts at the end of February.

Index funds that invest in baskets of commodities reduced net-long positions by 2.6 percent to 417,279 contracts in the week ended July 1 from the previous week, and by 7.8 percent from a record of 452,568 contracts reached in the week through April 29, the data show.

``The highs are likely in for the year as Northern Hemisphere crops march toward harvest, reducing supply worries, and demand slips due to high prices,'' Roach said in the report. ``In addition to getting weekly crop condition reports that will likely show the crop is improving, we will most certainly get reports that demand is shrinking.''

Corn is the biggest U.S. crop, valued at a record $52.1 billion in 2007, government figures show.

To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net

Last Updated: July 9, 2008 16:10 EDT