US corn and soyabean futures fell sharply on Tuesday, with corn touching its lowest since October 2014, after rain in dry areas of the US Midwest during the three-day holiday weekend bolstered harvest prospects for both crops, traders said. The decline in corn also pulled down wheat, already under pressure from ample global supplies and a big US harvest.
Chicago Board of Trade soyabean futures notched the biggest drop, shedding 5.5 percent. A limit-down move in soyameal futures added to the bearish tone hanging over soyabeans. The most-active CBOT corn contract fell 4.8 percent. CBOT soft red winter wheat was 3.1 percent lower and hit its lowest since September 2006. K.C. hard red winter wheat dropped to its lowest since January 2006.
Market watchers shrugged off forecasts for high temperatures to hit key growing areas in the coming days, saying the outlook did not call for the Midwest to heat up enough to stress the corn crop as it passes through its key pollination phase. "It is all about weather," said Tom Fritz, a partner with brokerage EFG Group in Chicago. "There is nothing extreme out there. It is (going) to get warm, but nothing extreme." At 9:38 am CDT (1438 GMT), CBOT December corn futures were down 17-1/2 cents at $3.49-1/2 a bushel.
The outlook for more rain in key growing areas of the US Midwest during the next two weeks outweighed concerns about some dry conditions in about 15 to 20 percent of the Midwest, including southeast Iowa and western Illinois. "The timely rains occurring in other spots and a lack of severe heat will aid pollinating corn," Forecaster Commodity Weather Group said in a note to clients.
CBOT November soyabeans were 62 cents lower at $10.75-1/2 a bushel. CBOT September soft red winter wheat was down 12-1/2 cents at $4.17-3/4 a bushel and K.C. hard red winter wheat for September delivery was off 10-1/2 cents at $4.01 a bushel. Some short-covering limited the declines in wheat futures. Traders were waiting for the US Agriculture Department's weekly update on crop conditions, which will be released at 3 pm CDT (2000 GMT).