Corn stays weak as market wrestles with US rain damage

PARIS/SINGAPORE: Chicago corn eased for a third straight session on Thursday, moving further away from a five-year high struck at the start of the week, as investors awaited a clearer picture on the impact of a rain-disrupted US spring planting campaign.

Soybean futures were also lower, with drier conditions so far this week in the US Midwest raising hopes farmers may make more headway in planting.

Wheat was down too, with investors similarly booking some profit after the recent weather rally and an Egyptian purchase of Black Sea wheat on Wednesday, which underlined the competition for exports.

A sharp fall in the dollar, after the US Federal Reserve signalled it was ready to cut interest rates as early as next month, lent some support to Chicago grains as it makes dollar-priced commodities cheaper overseas.

Grain markets were also awaiting weekly US export sales figures at 1230 GMT for an update on overseas demand.

The most-active corn contract on the Chicago Board Of Trade was down 0.4% at $4.39-1/4 a bushel by 1124 GMT, having dropped earlier in the session to a one-week low of $4.36-1/2.

The contract had touched its highest since June 2014 at $4.64-1/4 on Monday after unrelenting rain had led to the slowest US corn planting pace on record and raised doubts about harvest prospects.

CBOT soybeans shed 0.4% to $8.99-1/2, while CBOT wheat was down 0.9% at $5.22 a bushel.

A US Department of Agriculture (USDA) report on Monday showing farmers had nearly completed their planned corn planting prompted prices to consolidate.

Chicago futures were also curbed by increasing estimates of the corn harvest in Brazil, another major exporter.

"It seems the corn market is putting in a strong case for having reached a peak for now," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

"The US corn crop is going to be substantially smaller in season 2019. Nonetheless the drop does not leave supply tight, it just loses comfort."

Traders will get another indication of planting progress from the USDA's next weekly crop report on Monday before attention turns to the agency's revised acreage estimates on June 28.

The soybean market, which is very reliant on demand from China, will also be focused on the G20 summit at the end of the month during which US President Donald Trump and Chinese counterpart Xi Jinping are due to discuss their countries' trade dispute.

"With another (USDA) crop progress report coming Monday afternoon, as well as the G20 summit next weekend, the next catalyst is hard to predict," US brokerage Allendale said in a note.