CHICAGO: US corn and wheat futures fell more than 2 percent early on Tuesday, pressured by rainy conditions in key growing areas and expectations that the US government will issue a massive corn acreage forecast this week, traders said.
"The main reason for it is that we did get some good precipitation over the week," Ted Seifried, senior market strategist at the Zaner Group LLC. "We have been concerned about some dry areas, specifically in the North because of the mild winter we have had and the lack of snowcover. If we continue to see this trend change where we are getting the precipitation, we might be off to a really good start going into the growing season."
Traders also were squaring up positions ahead of the US Department of Agriculture's annual Outlook conference on Feb. 23 and 24 - an eclectic gathering of analysts, captains of industry, farmers, investors, academics and many more.
USDA will update its crop forecasts at the gathering and the data is likely to confirm that farmers will plant 94 million acres (38 million hectares) with corn and 74 million acres with soybeans.
"We are looking at the USDA outlook," said Erin Fitzpatrick, a Rabobank analyst. "Expectations are that they will be using baseline numbers which are bearish for corn."
Soybean futures also fell early, but the declines in that commodity were limited as the market sought to buy soy acres away from corn as farmers finalize their planting plans.
Forecats for a large corn crop have been pressuring the market recently as farmers around the US Midwest gear up to seed what is expected to be the largest corn acreage since 1944 during the next three months.
A boost to soil moisture reserves solidified the calls for a bin-busting crop and cast a bearish tone over the grains market despite supportive outside markets such as a weak dollar, strong open in US stock markets and rally in crude oil futures.
At 10:09 a.m. CST (1609 GMT), Chicago Board of Trade March corn futures were down 13 cents at $6.28-3/4 a bushel. Corn prices fell through their 30-day moving average early in the session but were finding some support near their 100-day moving average.
March soybean futures were just 5 cents lower at $12.62-1/2 a bushel while March soft red winter wheat dropped 14-3/4 cents to $6.29-1/4 a bushel.
Some drought-relieving snowfall was expected in the US Northern Plains spring wheat region this week and next week which will boost soil moisture reserves ahead of spring planting.
"We're about a month away from this becoming a major story, there's an ongoing drought there but they had 1 to 3 inches (2.5-7.6 cm) of snow on Monday and more is expected at the end of the week and next week," said John Dee, meteorologist for Global Weather Monitoring.
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