Corn retreats from 5 week peak as crop tour tempers storm worries

CHICAGO: US corn futures turned lower on Tuesday after earlier hitting their highest in more than a month as higher yields estimated on an annual Midwest crop tour tempered concern about storm damage across the Corn Belt.

Soybean futures declined but held near Monday's multi-month high as concerns over dry Midwest weather and brisk Chinese demand offset better-than-expected crop conditions, while wheat tracked corn lower.

As of 12:10 p.m. (1710 GMT), the most active corn contract on the Chicago Board of Trade was down 4 cents to $3.40-3/4 a bushel, after earlier hitting $3.46, a five-week high.

CBOT soybeans trimmed 5 cents to $9.10-1/4 a bushel, while wheat lost 12-1/4 cents to $5.14 a bushel.

Strong corn yield prospects found in Ohio and South Dakota by the Pro Farmer Midwest Crop Tour on Monday pressured markets. The tour projected Ohio's corn yield at 167.69 bushels per acre and South Dakota's at 179.24, both above recent-year tour averages.

The US Department of Agriculture's weekly crop progress report also indicated positive conditions, despite the Aug. 10 derecho windstorm that damaged crops, with 69% of the US corn crop in good-to-excellent condition, down from 71% a week earlier but above an average of trade expectations.

"Yes, there was damage there, we're acknowledging that. But I think it's overdone," said Joe Davis, director of commodity sales at Futures International.

Early estimates indicate the storm damaged more than 57 million bushels of grain storage in Iowa ahead of the autumn harvest, the state's agriculture department said.

Corn found underlying support from the USDA's confirmation that private exporters sold 325,000 tonnes of US corn, including 195,000 to China.

Hot, dry forecasts continue to threaten soybeans during key development, but crop tour assessments show strong yield potential, said Mike Zuzolo, president of Global Commodity Analytics.

"I think it's going to keep the market pinned into a range," he said. "Expectation is that we're going to continue to see drought worsen."