Corn extended a decline to a 34-month low as cool weather and moist soil increase yield prospects in the U.S., the world’s biggest grower and exporter. Wheat dropped to the lowest since June 2012, and soybeans fell.
Near-to-below-normal temperatures in the Midwest in the first half of August will favor corn pollination, while moisture will stay favorable in southern and eastern areas, DTN wrote in a forecast today. Farmers may harvest a record 13.95 billion bushels, 29 percent more than last year, when drought hurt crops, U.S. Department of Agriculture data show.
“We have another week of cool temperatures ahead, and some rains are going to hit the Corn Belt now through Wednesday,” Rich Nelson, the chief strategist at Allendale Inc. in McHenry, Illinois, said by telephone. “We do want some warmth to show up, maybe starting in late August or September, but that’s taking a back seat to this cool weather.”
Corn futures for December delivery fell 0.7 percent to settle at $4.605 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $4.56, the lowest for a most-active contract since Oct. 4, 2010. The grain retreated 6.3 percent in July, the sixth straight drop and the worst run since 1996.
Production will top the USDA’s forecast, rising to 14.269 billion bushels in 2013, researcher Doane Advisory Services Co. in St. Louis said Aug. 2. Doane’s August corn estimate last year was among the most-accurate.
Wheat futures for September delivery declined 2.3 percent to $6.4525 a bushel on the CBOT. The price earlier touched $6.415, the lowest since June 18, 2012, on speculation that livestock producers will switch back to corn in animal rations as the price spread between the grains widens.
Wheat on Aug. 2 was $1.9675 a bushel more expensive than corn futures, the most since February 2011. Wheat prices will decline as demand by feedlot manager drops, said Mike Zuzolo, the president of Global Commodity Analytics in Lafayette, Indiana.
“Wheat doesn’t work into the blending” for animal feed because its premium to corn is too high, Zuzolo said by telephone. “That wheat-corn spread will shut off the spigot of wheat feeding.”
Soybean futures for November delivery rose 0.1 percent to $11.8325 a bushel in Chicago. The price is down 16 percent this year.