PARIS: Chicago corn futures fell 1pc on Friday but remained set for their biggest monthly gain since 2015, as historic US planting delays due to incessant rain gripped the cereal market.
Wheat also eased but was poised for its biggest monthly rally in two years after tracking corn and also finding its own impetus due to potential rain damage to maturing winter wheat.
A pause in the rally was sparked by uncertainty created by US President Donald Trump's threat of tariffs against Mexico, usually the largest buyer of US corn, in response to illegal immigration across the US border.
Investors were assessing weather forecasts, while end of month positioning and the run-up to weekly US grain export data at 1230 GMT further contributed to subdued overnight trading in Chicago futures, analysts said.
The most-active corn contract on the Chicago Board of Trade was down 1.1pc at $4.31-1/2 a bushel at 1041 GMT, but were up 19pc over May, the biggest rose since June 2015.
On Wednesday, it hit its highest since June 2016, at $4.38.
"Geopolitics is also back to centre stage with tensions between the US and Mexico caused by immigration," crop consultancy Agritel said.
"Weather conditions are improving a bit on the very short end, but forecasts are predicting further rains next week."
President Trump said on Thursday he will impose a tariff on all goods coming from Mexico starting at 5pc and ratcheting higher until the flow of illegal migrants ceases.
However, the consequences of massive planting delays in the US Midwest remained the main focus of grain markets.
The International Grains Council on Thursday cut its forecast for world corn output in 2019/2020, as it lowered its US crop estimate.
"Corn has a real story and we estimate 35 million tonnes of losses in the United States because of planting delays and yield losses," said Ole Houe, director of advisory services at brokerage IKON Commodities.
CBOT wheat was down 1.4pc at $5.07-1/2 a bushel.
Over the month, it was showing a gain of over 18pc , the most since June 2017.
CBOT soybeans were down 0.4pc at $8.85-1/4 a bushel. Over May, the contract was up 3.7pc , which would be a first monthly gain since January.
The soybean market had been curbed by setbacks in US-Chinese trade talks and the idea that farmers would shift acreage from corn to later-planted soy.
But the unrelenting rain was raising the threat of area and yield losses for soybeans too.
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