Chicago | Reuters — Chicago Board of Trade corn futures tumbled on Tuesday to their lowest level since 2020 after a weekly report from the U.S. government showed better-than-expected crop conditions.
Soybean futures also slid on improved U.S. crop ratings, while wheat reached its lowest level in more than two months.
A risk-averse sentiment across commodity and wider equity markets, along with concerns over China’s economy, added pressure to grain futures, analysts said.
Declining crop prices benefit meat and poultry producers that use the harvests for livestock feed.
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The U.S. Department of Agriculture’s (USDA) weekly crop progress report, issued after trading ended on Monday, rated 59 per cent of the corn crop as good to excellent. That was up from 57 per cent a week ago and above analysts’ estimates for 58 per cent.
USDA also rated 59 per cent of the soybean crop as good to excellent, a jump from 54 per cent last week. Analysts expected 55 per cent.
“Improving in August is certainly bearish, because they typically don’t,” said Jim Gerlach, president of brokerage A/C Trading.
The most-active corn contract ended down 12-1/4 cents at $4.75-1/2 a bushel and reached its lowest price since Dec. 31, 2020 (all figures US$).
Traders had been watching for the contract to fall below $4.81 a bushel, which was Monday’s low and matched a July low that was the weakest price since January 2021.
“When you’ve got macro market pressure, the grains are not strong enough to stand on their own,” Gerlach said.
Soybeans lost 20-3/4 cents to close at $13.05-1/4 a bushel. Wheat declined 17-1/2 cents to $5.98-1/2 a bushel and hit its lowest price since June 1.
Analysts said tight U.S. supplies and an uptick in export sales should limit losses in soybean futures.
U.S. processors crushed more soybeans than expected last month, making it the largest July crush on record, National Oilseed Processors Association data showed on Tuesday.
— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore.
