Corn drops over 2% on US weather outlook; soy, wheat also down

SINGAPORE/PARIS: Chicago corn futures slid more than 2% on Thursday and soybeans dropped to a six-week low, as forecasts of improved weather in parts of the United States and a strong rise in the US dollar weighed on prices.

Wheat followed the downward trend after rising earlier in Asian trade and in the previous session.

"Weather forecasters continue to look for rain and cooler temperatures this weekend, while dry and hot weather prevails in the north west of the US Midwest until then," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

"That weather pattern is the market's fixation for now."

The most-active corn contract on the Chicago Board of Trade (CBOT) was down 2.4% to $6.56-3/4 a bushel by 1045 GMT, having closed up 0.8% in the previous session.

Most traded soybeans November were down 1.5% to $13.25-1/2 a bushel, the weakest since April 30.

Wheat futures fell 1.2% to $6.54-3/4 a bushel.

Forecasts for improving weather in the US Midwest crop belt weighed on corn and soybean futures, despite a drop in condition ratings for both crops.

Soybeans have been under pressure recently following news the US Environmental Protection Agency is considering ways to provide relief to US oil refiners from mandates requiring the blending of biofuels including soy-based biodiesel.

A stronger dollar, which makes the greenback-priced commodities expensive for buyers holding other currencies, also weighed on prices.

The dollar rose to its highest level in more than two months versus major peers after the Federal Reserve brought forward its projections for the first post-pandemic interest rate hikes into 2023.

Wheat exports from Russia, Ukraine and Kazakhstan will rise in 2021/22, a Reuters poll showed, driven by high crops and stockpiles as well as increased global demand.

The group, which exports its wheat mainly via the Black Sea to customers in Africa and the Middle East, faces tougher competition as prospects for this year's crop are also good in the European Union.