Corn fell in Chicago as expectations that U.S. harvests will rebound from last year’s drought outweighed data showing worsening crop conditions. Soybeans retreated from a two-month high.
U.S. corn output may be a record 13.76 billion bushels, 28 percent more than last year while still below July’s estimate, the Department of Agriculture said Aug. 12. Yields were 55 percent higher than last year in Ohio and more than doubled in South Dakota, according to results from the first day of the annual Pro Farmer Midwest Crop Tour. The USDA lowered its ratings for domestic corn and soybean conditions yesterday as dry weather intensified in parts of the Midwest.
"In spite of a new lower forecast of U.S. corn production, we do still remain bearish corn prices," Chris Gadd, an analyst at Macquarie Group Ltd. in London, said in an e-mailed report today. "The expected supply rebound should still be sufficient to see a large build in inventory, given the weak demand outlook."
Corn for delivery in December dropped 0.7 percent to $4.82 a bushel at 6:21 a.m. on the Chicago Board of Trade. Prices had reached $4.8675, the highest for a most-active contract since July 24. The grain plunged 43 percent since drought slashed last year’s crop and pushed prices to a record $8.49 in August 2012.
Soybeans for delivery in November fell 1 percent to $12.8975 a bushel, erasing a climb to $13.0975, the highest since June 19. The USDA expects production of the oilseed to expand 8 percent this year to 3.255 billion bushels.
Sixty-one percent of the U.S. corn crop was in good or excellent condition as of Aug. 18, down from 64 percent a week earlier, the USDA said yesterday. Sixty-two percent of soybeans received the top ratings, compared with 64 percent a week earlier. The report showed crops are maturing at a slower-than- average pace, leaving fields vulnerable to frost before the harvest, Macquarie said.
Drier-than-normal conditions stretch from North Dakota to Illinois, with areas of western Iowa, the top corn- and soybean- growing state, experiencing "moderate" drought as of Aug. 13, the U.S. Drought Monitor shows. Potential for rain is "fairly limited" in the Midwest during the next 10 days, forecaster DTN said in a report today.
In Ohio, corn yields may rise to 171.6 bushels an acre from 110.5 bushels in the same area last year, based on findings from the Pro Farmer tour. South Dakota corn yields may increase to 161.75 bushels an acre from 74 bushels. Soybean pod counts also were higher than last year in both states.
Wheat for delivery in December fell 0.7 percent to $6.4925 a bushel after reaching $6.56, the highest since Aug. 13. In Paris, milling wheat for delivery in November dropped 0.7 percent to 183.25 euros ($245.19) a metric ton on NYSE Liffe.