Chicago Board of Trade corn and soyabean futures plunged to their lowest in more than a month on Monday as improving weather for crop development across the US Midwest sparked a round of long liquidation by speculators, traders said. Wheat futures also fell, weighed down by the declines in corn and pressure from the ongoing harvest.
The grains and oilseeds also were caught up in a broad commodities sell-off, stemming from expectations of a near-term US interest rate hike and weakness in the Chinese stock market. "The perception is the (corn and soyabean) crops are stabilising, if not improving in some areas," said Tom Fritz, analyst at EFG Group. "Also, you have a general aura over the commodities markets - that they are in a liquidation phase."
Corn posted the biggest decline, with the front-month contract shedding 4.8 percent and hitting its lowest since June 25. It was the biggest one-day decline for corn in percentage terms since September 2013. Soyabeans fell 3.1 percent, their biggest drop since January. CBOT September corn futures settled down 19-1/2 cents at $3.73 a bushel.
The Commodity Futures Trading Commission's weekly Commitments of Traders report released on Friday afternoon showed that non-commercial traders had built up their biggest long position in corn since October 2012. CBOT August soyabean futures fell 30 cents to $9.61-1/4 a bushel. CBOT September wheat was 9-1/4 cents lower at $5.02-1/2 a bushel.
"Well, we started the season with perfect weather, fell into problems with too much rain in the east, now we are back to perfect weather, as the forecasts look like just scattered showers for the corn belt over the next 10 days, and some warmth, but no searing heat," Charlie Sernatinger, global head of grain futures at ED&F Man Capital said in a note to clients. A US Agriculture Department report on Monday afternoon was expected to show that good-to-excellent ratings for corn stabilised in the last week while soyabean ratings improved by 1 percentage point. Some weekend rains in areas west of the Mississippi River relieved parched growing areas. Additionally, forecasts for drier conditions and cooler-than-usual temperatures in the East were expected to help shepherd the crops through development during the next week to 10 days.
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