Corn, soybeans, wheat drop as welcome rain forecast for U.S. crops

The most-active corn contract on the Chicago Board of Trade lost 2.7% to $6.66-1/4 a bushel

  
Corn plants are seen on a field in Jalmolonga, Mexico September 9, 2020.

Corn plants are seen on a field in Jalmolonga, Mexico September 9, 2020.

REUTERS/Claudia Daut

HAMBURG- Chicago corn futures fell over 2% on Monday as new forecasts of rain in U.S. grain belts improved harvest prospects.

Soybeans and wheat were also down sharply after the sudden weekend turnaround in U.S. weather forecasts.

Markets continued to be weakened by a Reuters report the U.S. may scale down biofuel blending in fossil fuels, possibly cutting demand for corn and soy-based blending ingredients. 

Chicago Board of Trade most-active corn Cv1 fell 2.3% to $6.68-1/4 a bushel at 1051 GMT, after earlier on Monday hitting it lowest since June 3 at $6.53. New crop December corn lost 3.9%.

Wheat Wv1 fell 2.3% to $6.65 a bushel, soybeans Sv1 fell 1.7% to $14.82-1/4 a bushel.

"Corn and soybeans are being weakened today by the sudden change over the weekend in extended weather forecasts in the U.S. Plains from hot and dry to cooler with more rain," said Matt Ammermann, StoneX commodity risk manager.

"Just how much importance the market is placing on U.S. corn and soybeans getting more rain is shown by the sharp drop in prices today. But extended weather forecasts can be changed so the dryness issue is not over yet."

Corn and soybeans are seeing downward pressure from the reports about the U.S. possibly reducing biofuel use, he said. But confirmation and more details were needed, especially as environmental protection is such a key part of the Biden administration's strategy.

July soyoil fell 3.8% and palm oil fell nearly 10% on Monday. 

Consultancy Sovecon has raised its forecast of Russia's 2021 wheat harvest. 

Wheat is seeing spillover weakness from falls in corn while rain in the U.S. would also benefit wheat," Ammermann added.

"Crop prospects in the EU and Black Sea are improving and the question is being posed about if and when the Russian government will allow the crop to be exported."

(Reporting by Michael Hogan in Hamburg, additional reporting by Naveen Thukral in Singapore, editing by David Evans) ((michael.j.hogan@thomsonreuters.com; +49 172 671 36 54; Reuters Messaging: michael.hogan.thomsonreuters.com@reuters.net))


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