CHICAGO: US corn and soybean futures fell on Wednesday, with corn hitting its lowest in nearly a month as rainstorms provided relief to parched crops in Argentina, traders said.
Wheat prices were pulled lower by the weakness in corn and ample global supplies.
Prices plunged to session lows in midday trading after the latest weather forecasts showed that upcoming rain in South America would be even greater than expected, with as much as 1-1/2 inches falling in Argentina during the weekend.
"It's a little wetter in southern Argentina Saturday through Monday," said Andy Karst, meteorologist with World Weather Inc. "That is probably the biggest change."
The forecasts reinforced expectations for needed rain that South American farmers hoped would stabilize a crop that already has lost much of its potential due to the dryness.
"It is not that amounts or coverage (for the upcoming weekend event) have increased a great deal this morning, just that rain prospects continue to be reinforced for that span, and they move one day closer to some relief," Matt Zeller, analyst for INTL FCStone, said in a research note to clients.
At 11:40 a.m. CST (1740 GMT), Chicago Board of Trade March corn futures were down 10-1/2 cents at $5.93-1/2 a bushel. Prices bottomed at $5.93 a bushel, their lowest since hitting $5.84-1/4 on Dec. 19.
CBOT March soybeans were off 7-3/4 cents at $11.75-3/4 a bushel, finding support around their 30- and 50-day moving averages. CBOT March wheat lost 11-1/4 cents to $5.93-1/2 a bushel.
The grains market also remained under pressure from a US Agriculture Department report last week pegging corn and soybean supplies above expectations and wheat seedings bigger than market estimates.
"We are still kind of digesting the report from last week," said Jason Britt, analyst with Central States Commodities. "We got our curveball. Normally, you are looking at probably three to four days for the trade to get back into balance after they throw you a curveball like that."
The La Nina weather phenomenon, which has been linked to the hot and dry weather in South America this year, has displayed signs of weakening over the past two weeks, Australia's weather bureau said.
The drought conditions have caused many crop watchers to lower their estimates of the South American crops beyond the cuts to production the US Agriculture Department made in its monthly supply-and-demand report last week.
Private analyst Michael Cordonnier lowered his forecast of Brazil's 2011/12 soybean production to 71 million tonnes, down 1 million from his previous estimate. He cut his forecast for the Argentine soy crop by 1 million tonnes to 50 million tonnes.
For corn, the closely watched Cordonnier cut 2 million tonnes from his forecast for Argentine production and 1 million tonnes from his forecast for Brazil's crop.
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