July 7, 2010
CBOT corn and soy futures increase as USDA lowers crop ratings
CBOT corn and soy futures rose around half a percentage on Wednesday (July 7) as the USDA lowered crop ratings following excess rains in some producing regions.
Wheat futures were little changed after climbing to a 4-month top in the previous session on concerns over hot weather threatening the European crop.
The USDA lowered its good to excellent ratings for US corn futures and soy futures on Tuesday (July 6) as damp conditions took a toll on crops in key production states such as Iowa.
In its weekly report after the market closed to Tuesday (July 6), USDA rated the corn crop as 71% good to excellent, down from 73% last week. Soy conditions were rated 66% good to excellent, down from 67% a week ago.
Investors are eyeing a USDA report on world supply and demand set for Friday (July 9) release for cues on yields and supplies.
"It will be important to get an understanding of what USDA's view is on global wheat situation and where they peg Western European, Black Sea and Canadian wheat crops after recent adverse weather that we have seen in those parts of the world," said Luke Mathews, commodity strategist at Commonwealth Bank of Australia (CBA).
"We have seen a slight dip in crop conditions. It is going to be interesting to see what USDA does with respect to crop production for all major commodities on Friday," he said.
CBOT corn for July delivery rose 0.4% to US$3.61-½ per bushel by 0317 GMT and soy for July delivery rose 0.6% to US$9.70 a bushel.
CBOT July wheat lost 0.2% to trade at US$4.92 a bushel after touching a high of US$5.11 a bushel on Tuesday (July 6).
The front-month wheat contract has risen nearly 6% so far this month as a flurry of short covering has driven the market amid forecasts for reduced European production.
Russia's agriculture ministry lowered its forecast for this year's grain crop to 85 million tonnes from 88 million to 90 million tonnes, citing drought. But it said the exportable surplus would remain at up to 20 million tonnes.
And the French farm ministry on Tuesday (July 6) projected France's 2010 soft wheat crop at 35.3 million tonnes, down 2.5% from 2009, in its first estimate for this year's crop.
In the US, weather is crucial for the development of the corn crop as it enters the key pollination stage. Heavy rains moved through the US western belt over the long US holiday weekend, adding more moisture to already water-logged crop fields while the east was mostly dry, a forecaster said.
