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Corn price drops as US farmers make rapid planting progress

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Wheat and soybeans dropped after the US Department of Agriculture (USDA) gave a positive picture of US crop conditions and sowing on Monday.

The Chicago Board of Trade's most-active corn contract was down 1.1pc at $4.11-1/4 a bushel by 1115 GMT.

Wheat dropped 1.2pc to $5.01 a bushel and soybeans fell 0.5pc to $8.54 a bushel.

The USDA's weekly crop report late on Monday said that US corn planting was 83pc complete, up from only 67pc a week earlier and matching analyst expectations.

The agency rated 59pc of the US corn crop as good-to-excellent, ahead of market expectations of 54pc.

"US farmers made rapid progress in corn sowings this week, which is weakening prices today," said Matt Ammermann, commodity risk manager with INTL FCStone. "Soybeans and wheat are also falling after the good assessment of US sowing progress and crop conditions."

Ammermann also said that a question hangs over the condition of US corn, given that sowings are usually finished by this time of year.

"A problem is that corn has been planted so late that it is still not really possible to assess the condition," he said. "This is a factor reducing the price fall today despite the rapid planting progress."

The USDA said that 81pc of the US spring wheat crop is in good-to-excellent condition, below last week's 83pc but above the 70pc a year ago.

US soybean planting is 60pc complete, exceeding forecasts of 56pc.

"US soybean planting progress was also faster than anticipated in the past week," Ammermann said. "The condition of US spring wheat and winter wheat is also looking positive.

"Crop weather in the Black Sea region is also not looking as bad as feared. This reduced threat to wheat crops in Russia and elsewhere is also a weakening factor today."

The USDA monthly world supply and demand report including US new-crop yield forecasts is due later on Tuesday. However, some traders said the report will not yet reflect the full impact of late planting.

"The agency is expected to trim its estimates for corn and soybean yields from May's report," brokerage Allendale said in a note.

"As crop progress improves, traders will focus on weather patterns and field progress."

Copyright Reuters, 2019