Chicago | Reuters – Chicago corn and soybean futures dropped sharply on Monday as hopes of Chinese buying fizzled and forecasts of cooler weather in the U.S. Midwest eased concerns about crop yield losses.
Wheat prices also were lower, pressured by bigger European yields, traders said.
September corn futures on the Chicago Board Of Trade was down 8 cents, or 1.9 per cent at $4.22-3/4 a bushel as of 11:23 a.m. CDT (1523 GMT), having gained 1.4 per cent in the previous session.
Temperatures are beginning to cool across much of the Corn Belt after storms and extreme heat over the weekend threatened to curb U.S. corn yields, according to Commodity Weather Group on Monday.
But even if high temperatures return, the impact on pollination may not been too severe, said Karl Setzer, with Agrivisor. “The reason is the seed genetics are so much better than they were in the past,” he said.
Large speculators raised their net long position in CBOT corn futures in the week to July 16, regulatory data released on Friday showed.
Traders are also awaiting the U.S. Department of Agriculture weekly crop progress report. Expectations are for no changes in good to excellent ratings from last week.
The CBOT’s August soybean contract fell 11-3/4 cents, or 1.3 per cent to $8.90-1/4 a bushel in mid-day trading on Monday.
Dealers said uncertainty about the ongoing trade tensions between the United States and China continued to weigh on prices.
“The market has been hinged on the idea that China may announce the purchase of soybeans,” said Mike Zuzolo, of Global Commodity Analytics. “Soybeans started tumbling when the announcement never came.”
U.S. President Donald Trump said on Friday that U.S. Treasury Secretary Steve Mnuchin had a very good talk with his Chinese counterpart, amid signals from China that officials could soon meet face-to-face in their bid to end a yearlong trade war.
Setzer added that in the eyes of grain traders, China buying soybeans has been more “rumor than fact” at this point.
The CBOT’s September wheat contract was down 9-3/4 cents, or 1.9 per cent to $4.92-3/4 a bushel on Monday.
The European Union is set for a larger wheat harvest this summer. A heat-wave in late June wilted some crops but had a less severe impact than initially feared, traders and industry officials said on Friday.
The wheat market is facing pressure as rapidly advancing harvest across the northern hemisphere boosts global supplies.