June 21, 2016 / 5:27 PM / 2 years ago

GRAINS-Corn drops below $4 as U.S. weather outlook improves

* CBOT corn sags as funds liquidate long positions
    * Soybeans follow corn; weather seen as less threatening
    * USDA maintains U.S. corn crop ratings, cuts soybeans
    * Wheat nears one-month low as U.S. harvest continues

 (Updates prices, adds quotes, changes byline, dateline,
previous LONDON)
    By Julie Ingwersen
    CHICAGO, June 21 (Reuters) - U.S. corn futures fell below $4
a bushel on Tuesday for the first time in nearly a month as
forecasts for less-threatening weather in the Midwest prompted
funds to liquidate long positions, traders said.
    Soybeans and wheat followed corn's lead. K.C. hard red
winter wheat futures <0#KW:> hit contract lows.
    At 11:49 a.m. CDT (1649 GMT) at the Chicago Board of Trade,
the July corn contract was down 22 cents at $3.99-1/4 a
bushel after falling to $3.96-3/4, its lowest since May 25.
    July soybeans were down 5 cents at $11.38-1/2 a bushel
after dropping to $11.28-3/4, near last week's low. CBOT July
soft red winter wheat was down 9-1/4 cents at $4.63-3/4 a
    Corn led the move, with technical selling accelerating as
the new-crop December contract fell through chart support
near $4.20.
    "It's grand-scale liquidation in the corn market due to
better moisture in the forecast and cooling temperatures," said
Tom Fritz, a partner with EFG Group in Chicago. "It looks like
you hit some major sell-stops."
    Commodity funds had built up a massive net long position in
CBOT corn in recent weeks as the spot contract neared a
two-year high on export demand tied to tightening South American
supplies and uncertainty about the U.S. growing season.
    But the U.S. Department of Agriculture's weekly crop
progress report late on Monday rated 75 percent of the U.S. corn
acreage in good to excellent condition, unchanged from the
previous week, despite a hot spell in the Midwest. Analysts
surveyed by Reuters had expected a decline in crop ratings.
    Forecasters called for much-needed rains this week, easing
worries about dryness. The USDA's report showed topsoil moisture
declining in big corn states, including Iowa, Illinois and
    "The prediction of rain has gone some way to allaying fears
of an overly dry summer," Commerzbank said in a market note.    
    Soybean futures sagged in sympathy with corn, although the
unwinding of long corn/short soybean spreads lent underlying
    The USDA rated 73 percent of the U.S. soybean crop as good
to excellent, down from 74 percent a week earlier and in line
with trade expectations.
    CBOT wheat followed the weaker trend, with the July contract
 falling to $4.62 a bushel, its lowest since May 24. The
market faced additional seasonal pressure from the U.S. winter
wheat harvest, which was 25 percent complete by Sunday, the USDA
    CBOT prices as of 11:47 p.m. CDT (1647 GMT):
                                   Net     Pct  Volume
                Name      Last  change  change        
 CBOT wheat     Wc1     463.75   -9.25    -2.0   40856
 CBOT corn      Cc1     399.50  -21.75    -5.2  209685
 CBOT soybeans  Sc1    1137.50   -6.00    -0.5   58116
 CBOT soymeal   SMc1    394.20   -8.50    -2.1   31996
 CBOT soyoil    BOc1     31.39   -0.25    -0.8   38412
    CBOT wheat, corn and soybeans shown in cents per bushel,
soymeal in dollars per short ton and soyoil in cents per lb.

 (Additional reporting by Nigel Hunt in London and Melanie
Burton in Melbourne; editing by Christian Schmollinger and David
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