July 13, 2010

US corn futures decline third day on improving yields

CBOT corn futures fell for the third day as the US crop condition improved, boosting its yield potential.

Corn for December delivery fell as much as 1.5% to US$3.86 a bushel on the CBOT and was at US$3.8675 a bushel at 2:30 p.m. Singapore time. About 73% of the US corn crop was rated in good or excellent condition as of July 11, up from 71% a week earlier, the country's Department of Agriculture said in a report yesterday.

"As we progress through the US growing season and get a more concrete idea of production and final numbers, I think the supply side is going to remain the primary driving factor" for prices, Toby Hassall, a research analyst at CWA Global Markets Pty, said by phone from Sydney.

Corn's volume for export inspected at US ports fell 15% to 34.519 million bushels in the week ended July 8, from a week earlier, the USDA said yesterday. China sold a total of 606,900 tonnes of the grain from state stockpiles in Jilin, Liaoning, Heilongjiang and Inner Mongolia through auctions today.

November soy delivery fell for a second day, losing 0.4% to US$9.475 a bushel in Chicago. As of July 11, 65% of the soy crop in the US, the largest exporter, was in good or excellent condition, down from 66% a week earlier, the USDA said yesterday.

Soy inspected for export at US ports more than doubled to 6.5 million bushels in the week ended July 8 from a week earlier, the department said yesterday.

"The market is weighing up the outlook for the US crops and what that will mean for the underlying balance sheet," CWA's Hassall said, referring to the global supply and demand for corn and soy.

September wheat delivery fell for a third day, declining 0.6% to US$5.325 a bushel in Chicago. US farmers had harvested 63% of the winter varieties of the crop as of July 11, up from 54% a week earlier and 61% a year ago, the USDA said yesterday.

Russia's worst drought in a decade has damaged more than half of grains planted in 11 regions and hot, dry weather may continue for the rest of this month, Anna Strashnaya, head of agro-meteorological forecasts at the Federal Hydrometeorological Service said July 9. USDA data show Russia as the world's third-largest wheat exporter in the 2009-2010 season.

The country's Agriculture Ministry reduced its forecast for the total grain crop by 5.6% to 85 million tonnes on July 5. That compares with last year's harvest of 97 million tonnes. The Saratov region, which accounted for 3.2% of Russia's wheat crop last year, reported grain yields at 0.75 tonnes (1,653 pounds) a hectare last week, compared with 1.4 tonnes last year.