CHICAGO: Chicago Board of Trade corn futures sank by the daily, exchange-imposed limit on Tuesday as forecasts for cool, wet weather in US growing areas eased concerns about unfavourable crop conditions.
The market pulled back after climbing 12% last week on lower-than-anticipated US plantings estimates from the Department of Agriculture. The estimates, issued on Wednesday, made futures more sensitive to dryness in northern and western portions of the US crop belt.
It is difficult for agricultural markets to rally with largely favourable Midwest weather seen into mid-July, said Rich Feltes, head of market insights for broker RJ O’Brien. Farmers’ lower-than-expected plantings are being overshadowed by the potential for above-average yields across 75% of the US growing area, he said.
The favourable weather outlook, if realized, will ease stress on corn crop just as it passes through its key yield-determining stage of pollination.
“There is little question over the wetter outlook for this week that is expected to provide beneficial rains to some of the driest areas of Iowa, Minnesota, and the Dakotas, while also reducing heat risks for the region,” said Arlan Suderman, chief commodities economist for broker StoneX.
CBOT corn futures were down by the daily 40-cent limit in every contract month through July 2022 by 10:24 a.m. CDT (1524 GMT). Other markets were also sharply lower.
Soyabeans were down 78 cents at $13.21. Wheat was 30-3/4 cents lower at $6.22.
Traders are waiting for the USDA to issue a weekly update on US crop conditions on Tuesday afternoon, one day later than normal because markets were closed on Monday for the US Independence Day holiday.
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