July 28, 2010

US corn and soy futures decline as rains boost yield potential

Corn and soy fell, erasing earlier gains, on speculation that rain will improve yield potential of crops in the US, the biggest producer and exporter.

Up to 3 inches (7.6 centimetres) of rain since Monday (July 26) has relieved dry soil conditions in the South, according to weather reports. Crops throughout the country are seen to benefit from four storms over the next two weeks. About 72% of the nation's corn and 67% of the soy were rated good or excellent as July 25, the USDA said.

Corn futures for December delivery fell 1 cent, or 0.3%, to US$3.77 a bushel on the CBOT, after earlier rising 1.3%. Earlier, the most-active contract touched US$3.7575, the lowest level since July 1. The commodity has gained 9.6% since June 29, the day before the government said US farmers planted less this year than they had planned.

Soy futures for November delivery fell 0.5 cent to US$9.655 a bushel, erasing an earlier gain of 0.8%. Yesterday, the price dropped 1.6%, the most since June 4.

Corn is the biggest US crop, valued at US$48.6 billion in 2009, followed by soy at US$31.8 billion, government figures show.