Chicago | Reuters — U.S. corn futures dropped 1.4 per cent to a one-year low on Tuesday, pressured by ample supplies from the nearly completed harvest of the second-largest domestic corn crop on record, traders said.
Soybeans declined, following corn lower, as improving crop weather in South America added to bearish sentiment. But wheat futures firmed.
Chicago Board of Trade December corn ended down 4-3/4 cents at $3.37-1/2 per bushel after dipping to $3.37-1/4, a contract low (all figures US$). That also was the lowest for the most actively traded contract since Nov. 15, 2016.
CBOT January soybeans dropped 6-1/2 cents to $9.67-3/4 a bushel while December wheat rose 3-3/4 cents to $4.28.
Technical selling in corn accelerated after slipping below its previous low, which was set last week after the U.S. Department of Agriculture raised its estimate of the U.S. corn yield to a record 175.4 bushels per acre.
The government put corn production at 14.6 billion bushels, second only to the 2016 crop.
“It’s a crop that is bigger than what they thought. The end-user has his hands in his pockets, and world competition is still keen. That all adds up,” said Don Roose, president of Iowa-based U.S. Commodities.
USDA late Monday said the corn harvest was 83 per cent complete and the soybean harvest was 93 per cent complete.
Better weather in South America, including beneficial rains this week in parts of Brazil, bolstered global production prospects.
“The rains in Mato Grosso yesterday were enough to convince people that the rest of the Brazilian planting progress will be wrapped up in the next few weeks… If soybeans are planted in timely matter, then the second-crop corn should not have any issues going into the ground,” said Terry Reilly, senior commodity analyst with Futures International.
However, mostly dry conditions were expected next week in Argentina’s main agricultural area, which could delay soybean planting.
Broad weakness in commodities added pressure. The 19-market Thomson Reuters/CoreCommodity Index was down 1.3 per cent, hitting its lowest since Nov. 3.
CBOT wheat bucked the weak trend, firming on technical buying including short-covering, and a weaker dollar, which in theory makes U.S. wheat more attractive on the global market.
“On wheat, export competitiveness will be a critical factor in the near future, especially between the U.S. and the Black Sea region before the Black Sea slows down for the winter,” said Graydon Chong, senior commodity analyst with Rabobank.
— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Mark Weinraub in Chicago, Michael Hogan in Hamburg and Naveen Thukral in Singapore.