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Corn Extends Drop to 33-Month Low on U.S. Crop; Soybeans Decline

July 29 (Bloomberg) -- Corn extended declines to a 33-month low and soybeans fell on speculation that U.S. crops will benefit from cooler weather and rain in the next two weeks. Wheat rose.

Temperatures will average below normal over much of the Midwest in the next two weeks, helping to boost yields in areas with adequate soil moisture and reducing stress on crops that have not received significant rain this month, World Weather Inc. said in a report today. Fields from Kansas to Kentucky will get rain during the next two days and some crops in Nebraska and Iowa will benefit from moisture beginning Aug. 1, the private forecaster said.

“Corn and soybeans are in generally good condition, and the weather remains favorable for the next two weeks,” Jim Gerlach, the president of A/C Trading Co. in Fowler, Indiana, said in a telephone interview. “It’s too early to start worrying that current cool weather will result in early freeze and crop losses until later in August.”

Corn futures for December delivery fell 0.6 percent to close at $4.7325 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $4.7125, the lowest for a most-active contract since October 2010. Prices declined 4.9 percent last week.

Soybean futures for November delivery dropped 0.7 percent to $12.20 a bushel. Prices, which fell 3.6 percent last week, touched $12.0725 on July 26, the lowest since Feb. 2, 2012. Soybeans for delivery in August rose 1.3 percent after plunging 9.5 percent last week on increased farmer sales and slowing demand from processors.

U.S. corn production may jump 29 percent to a record 13.95 billion bushels, while soybean output will rise 13 percent to 3.42 billion bushels, the government forecast July 11.

‘Growing Rapidly’

“In most areas, the crops are growing rapidly, and production figures are higher and rising,” economist Dennis Gartman said today in his daily Gartman Letter. “We may well see a corn crop becoming steadily closer to 15 billion bushels.”

Wheat futures for delivery in September rose 0.2 percent to $6.515 a bushel in Chicago. Prices have declined 27 percent in the past 12 months.

U.S. farmers harvested about 75 percent of the winter-wheat crop as of July 21, down from an average 76 percent from 2008 to 2012, government data showed last week. USDA is scheduled to update harvest progress later today.

“The harvest is winding down, and U.S. farmers are storing remaining crops,” Gregg Hunt, a market analyst and broker at Archer Financial Services Inc., said in a telephone interview. “We are starting to see some demand developing after the break in prices.”

To contact the reporters on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net; Whitney McFerron in London at wmcferron1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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