US corn futures fell to a two-week low on Thursday as forecasts for dry weather around the US Midwest next week fuelled expectations for a large crop this fall, traders said. "The market is still very much focused on US production prospects," said Toby Hassall, an analyst at CWA Global Markets.
Soybean futures also fell as the weather outlook improved, boosting prospects for a US crop that has had its early development stalled by heavy rainstorms during the past few weeks. Wheat futures edged higher as traders covered short positions in the beaten down market. Wheat prices closed well below their intraday peaks as big supplies continue to pressure the market, despite some weather concerns for the crop in places such as Canada, Russia and Kazakhstan. "Globally, we have seen the largest wheat crop we are going to see and now start to tighten up a little more," said Mark Schultz, chief market analyst for Northstar Commodity Investment Co.
Concerns about tight supplies buoyed soybean futures during the trading day but the market gave up its gains by the end of the day as expectations for good crop weather grew. Chicago Board of Trade corn futures for July delivery closed down 1-3/4 cents at $3.44-3/4 a bushel. Prices fell as far as of $3.42-1/2 earlier in the session, their lowest level since $3.36 on June 10.
Cooler and drier weather forecast into next week could be nearly ideal for the start of US corn pollination, FC Stone analyst Doug Jackson said in a report. Traders are also starting to focus on the key June 30 US government report on planted acres and stocks, which could put even more pressure on corn futures.
"(The) corn market could face a double whammy of the confirmation of larger planted acreage and a significant reduction in corn feed use estimates," said Jackson. CBOT July soybeans ended down 2-1/2 cents at $9.55-1/2 a bushel as the market shrugged off better-than-expected export sales data from the US Agriculture Department.
Despite the decline, nearby soybeans gained 9 cents on new-crop contracts on concerns about tight supplies ahead of this year's harvest. A US Census Bureau report showed that the soybean crush in May beat expectations, indicating good domestic demand. A limited availability of crushing supplies at processors around the Midwest has supported soybean prices during the past few months.
CBOT soft red winter wheat for July delivery settled up 3/4 cent a bushel at $4.63, after climbing as high as $4.68-1/4 a bushel during the session. The market managed to hold on to recent gains after plantings in Canada were cut back by heavy rain, which has sparked concerns that already lower forecast acreage could further erode as plantings are delayed.