US corn and soyabean futures eased on Wednesday after reports of some better-than-expected yield prospects encouraged profit-taking from early week highs that stemmed from the country's worst drought in 56 years. Wheat snapped a five-session streak of increases with additional pressure from prospects for a big Canadian crop, while corn and soya exerted spillover pressure.
"The bean rally is taking a break with some profit-taking by the longs, and that's got the other markets down with them. The market is in a sit-and-hold mindset, backing and filling, profit-taking and awaiting more information," said Mike Zuzolo, president of Global Commodity Analytics.
US corn and soyabean prices hit record highs this summer as scorching temperatures and a relentless drought ravaged crops in the United States, while drought also raised fears Russia would restrict its massive wheat exports. Chicago Board of Trade new-crop November soyabeans fell 4-3/4 cents, or 0.3 percent, to $17.27-3/4 a bushel after hitting a contract high of $17.34-1/4 on Tuesday.
December corn shed 4 cents, or 0.5 percent, to $8.34-3/4 a bushel while December wheat slid 5 cents, or 0.5 percent, to $9.17 a bushel. The spotlight this week is on the Pro Farmer Midwest Crop Tour - a group of experts taking a close look at the precise state of US crops and giving immediate impressions.
Tour results were mixed on Wednesday. Corn and soyabean fields in south-west Iowa are expected to produce about the same amount of crops as last year, according to field surveys, but in central Illinois, the No. 2 growing state of corn and soya, yields are likely to be much lower than average. "After an avalanche of nothing but discussion of how bad these conditions are, numbers coming out are maybe mixed," Rich Nelson, chief strategist at Allendale Inc, said. "Maybe (there is) a change in mindset right now."
The big picture is still grim. Analysts surveyed by Reuters expect the drought to drop the average US corn yield to 121.5 bushels per acre, the lowest in 16 years, and corn production to 10.5 billion bushels, an eight-year low. US soyabean yield was pegged at 36.6 bushels per acre, the lowest in eight years, and production is expected at 2.713 billion bushels, a four-year low.