Soybean and corn futures fell on speculation that Midwest rain during August limited crop damage caused by severe drought in June and July in the U.S., the world’s biggest producer of the commodities.
Soybean yields are about 5 bushels an acre higher than farmers forecast, and corn yields have been a “pleasant surprise” after rain in the past 30 days, Scott Stoller, a grain merchandiser at Michlig Agricenter Inc. in Manlius, Illinois, said in a telephone interview. Dry weather expected in the next two weeks will quicken the harvest, he said.
“The markets are reacting to the reality that U.S. supplies will be larger” than the government forecast, Bill Biedermann, a market analyst at Allendale Inc. in McHenry, Illinois, said in a telephone interview.
Soybean futures for November delivery fell 3 percent to close at $16.1875 a bushel at 2 p.m. on the Chicago Board of Trade. Earlier, the price touched $16.16, the lowest for the most-active contract since Aug. 15. This week, the oilseed has dropped 6.9 percent, heading for the biggest slump in three months. The commodity soared to a record $17.89 on Sept. 4.
Corn futures for December delivery declined 1.4 percent to $7.46 a bushel. The price has dropped 12 percent from a record $8.49 on Aug. 10.
Corn output will fall 13 percent this year to 10.727 billion bushels (272.5 million metric tons), the lowest since 2006, the U.S. Department of Agriculture said on Sept. 12. The soybean harvest may be 14 percent smaller at 2.634 billion bushels. About 10 percent of the soybean crop and 26 percent of the corn were harvested as of Sept. 16, agency data show.
Corn also fell as U.S. export sales for delivery before Aug. 31 fell to 69,878 metric tons last week, compared with 598,126 tons a year earlier and the lowest for the date since at least 2003, government data show.
“Export demand is awful,” Biedermann said.
Corn is the biggest U.S. crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion.