- Corn retreats after rallying on fears of hot, dry conditions.
- Some forecasts show wider rainfall, easing heat next week.
- Investors also adjust positions before USDA crop report.
- Wheat, soybeans fall
PARIS/SINGAPORE: Chicago corn fell on Wednesday as market participants adjusted positions before US government grain forecasts and assessed crop risks after a hot, dry spell fuelled a rally earlier this week.
Wheat and soybeans also fell, with additional pressure from a pullback in spring wheat and palm oil prices.
The most-active corn contract on the Chicago Board Of Trade (CBOT) was down 1.0% at $6.73 a bushel by 1119 GMT.
New-crop December corn shed 2.1% to $5.97, slipping back below $6 after breaching the psychological threshold when it rose to its highest since mid-May on Monday.
A sharp cut by the US Department of Agriculture (USDA) to its rating of corn crop conditions on Monday fanned concern about the impact of warm, dry conditions in part of the Midwest.
The USDA's first rating of soybean conditions was also below average market expectations.
"The dry and hot weather in the US that led to speedy planting progress continues and is now resulting in below-average crop ratings," Rabobank said in a note.
Warmer than average temperatures and sparse rain were forecast in the week ahead in western Midwest zones, although some charts pointed to easing heat and more widespread rainfall for the week after.
Market attention is turning towards the USDA's monthly world supply and demand outlook on Thursday, with analysts on average expecting the agency to cut its projections for US corn stocks, against a backdrop of brisk Chinese demand and Brazil's drought-affected corn crop.
CBOT wheat was down 1.1% at $6.77-3/4 a bushel, and soybeans eased 0.7% to $15.69-3/4 a bushel. Rainfall in Canada has cooled a rally in spring wheat futures, which were down about 2.5%, reducing support for winter wheat for which US and European growing conditions are generally favourable.
Palm oil, which competes with soybean oil, dropped nearly 5% on Wednesday due to rising palm oil supply and lower export estimates.