Corn and soybeans fell on speculation that favorable weather conditions in the Midwest will help boost yields in the U.S., the world’s largest grower and exporter of both crops.
Corn for December-delivery fell 0.2 percent to $3.8375 a bushel on the Chicago Board of Trade at 10:41 a.m. Singapore time, after declining as much as 1 percent earlier. Soybeans fell for the first time in five sessions.
Much of the Great Lakes region through the northern Plains and the Rockies had “noticeably cooler and less humid conditions ushering into the Midwest,” Accuweather.com said in a report posted today.
“The corn market in particular, is feeling the weight of favorable weather conditions in the U.S., which is the main influence in the market this early morning,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia said by phone from Sydney today. Still, prices may rise on expanding imports by China, the world’s second-largest consumer of the grain, Mathews said.
China’s corn imports may more than double to 5.8 million metric tons next year from a year ago, and may expand further to 15 million tons in the 2014-2015 season, as the Asian nation enters a “new era” of buying from overseas, the U.S. Grains Council said, citing Shanghai JC Intelligence Co.
Imports were forecast to rise from 1.7 million tons this year, because even with normal weather, China won’t be able to produce enough grain to meet demand as incomes rise, the council said on its website, citing Shanghai JC Chairman Hanver Li.
“China buying is certainly something that’s going to be supportive for global grain prices particularly in the corn space,” Mathews said. “The natural market to supply China in the corn space is certainly the U.S. That’s something that’s supportive of U.S. corn prices.”
The U.S. was forecast to account for 55 percent of global corn trade, and 40 percent of the world’s total output of the grain next year, according to USDA’s July 9 forecast.
November-delivery soybeans declined 0.2 percent to $9.795 a bushel, after declining as much as 0.7 percent earlier.
Twenty-two of 31 traders and analysts surveyed from Chicago to Tokyo on July 23 said corn will fall for the second-straight week, and 18 predicted soybeans will decline this week, on speculation that rain and mild temperatures the next two weeks will increase the yield potential for crops in the U.S.
September-delivery wheat slipped 0.5 percent to $5.9325 a bushel, after declining as much as 0.8 percent earlier.
The decline in wheat prices “could be simply a correction from the strong prices that we’ve had the past couple of weeks,” Mathews said. “The market is likely to trade in limbo,” until the USDA releases its next update on global agricultural supply and demand estimates next month, he said.