Corn hits contract lows

US corn futures fell to contract lows on Wednesday as optimal weather in the heart of the Corn Belt boosted prospects for a bumper harvest this autumn, traders said. Soyabean futures also fell while wheat firmed on bargain buying after falling to a 4-1/2 month low this week. Traders appeared to be adjusting positions ahead of the US Independence Day holiday on Friday.
At the Chicago Board of Trade, September corn settled down 3-3/4 cents at $4.12-1/4 per bushel. August soyabeans ended down 13 cents at $13.14-3/4 per bushel. September wheat settled up 3 cents at $5.75-1/2 a bushel. In corn, the benchmark December contract, representing the 2014 US harvest, fell 4-3/4 cents at $4.18 after setting a contract low at $4.16-1/4.
The slide reflects the declining risk of a weather problem as the US corn crop nears pollination, a crucial phase for determining yield. The bulk of the crop normally pollinates in mid-July. "The weather forecast remains largely unchanged, which promotes fantastic development of corn and beans across the Midwest," said Terry Reilly, grains analyst with Futures International in Chicago.
Heavy rains have fallen across the region in recent weeks, and there was no sign of a shift to stressful hot and dry weather. "Over the two-week period, it doesn't seem like we have any problems out there," Reilly said. Expectations China may end its corn stockpiling programme as it struggles with massive state reserves added pressure. Soyabeans followed corn lower, declining for a fourth straight session as commodity funds liquidated long positions in both products following bearish stocks and acreage reports from the US Department of Agriculture.
The USDA on Monday estimated US 2014 soyabean plantings at a record 84.8 million acres, exceeding market expectations. USDA estimates of June 1 soya and corn stocks also came in above average trade estimates. CBOT wheat firmed, but K.C. hard red winter and MGEX spring wheat futures fell on fund liquidation. Commodity funds hold a net long in the two smaller markets but are net short in CBOT wheat. K.C. wheat was also pressured by expectations that USDA might raise its estimate of US 2013/14 hard red winter wheat ending stocks in a monthly supply/demand report next week, given state figures in Monday's June stocks report.