Corn, soybeans ease after US crop report

PARIS/SINGAPORE: Chicago corn fell on Tuesday as a better than expected US crop rating tempered weather concerns that had driven the market to a 5-1/2 month high in the previous session.

Soybeans ticked down, consolidating after a two-year high on Monday, with the US Department of Agriculture's (USDA) crop rating for the oilseed in line with expectations and traders assessing forecasts of light rain in the Midwest.

Developing drought in the Midwest grain belt, along with the impact of a mid-August wind storm, have led traders and analysts to scale back previous projections calling for massive autumn corn and soybean harvests.

"The better than expected corn crop rating should weigh on prices a bit today, even if conditions remain worrying," a European trader said.

The USDA rated 62% of the corn crop in good-to-excellent condition in its weekly crop progress report, down 2 percentage points from the previous week, but above the average analyst estimate in a Reuters poll.

Analysts still expect large global supplies of corn, soybeans and wheat.

"The world has plenty of corn," said Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney.

"The rally in corn prices was largely fund driven."

The most-active corn contract on the Chicago Board Of Trade was down 1.1% at $3.53-3/4 a bushel by 1141 GMT.

It earlier touched a one-week low of $3.51 as it eased back from Monday's high of $3.64-1/4.

CBOT soybeans was off 0.3% at $9.50-3/4 a bushel, easing back from Monday's peak of $9.66-3/4.

The USDA's soybean rating declined to 66% good-to-excellent, down 3 points from a week earlier and in line with trade expectations.

Traders will be watching for more sales to China after a wave of corn and soybean exports contributed to last month's rally.

CBOT wheat was unchanged on the day at $5.52-1/4 a bushel, after reaching on Monday its highest since April 20 at $5.60-1/4.

Support from a weaker dollar and higher prices in the Black Sea region was being curbed by forecasts for bumper crops in exporting countries like Russia and Canada, traders said.