US corn and soybean futures fell on Tuesday from two-week highs as stable crop ratings eased concerns about dry Midwest weather, while China’s devaluation of the yuan led to broad weakness in commodity markets. Wheat also slipped, one day after rallying in step with corn and soybeans despite signs of large supply from Northern Hemisphere harvests.
At the Chicago Board of Trade, spot September corn settled down 13-3/4 cents, around 3 percent, at $3.76-1/2 per bushel. New-crop November soybeans fell 23 cents to $9.71-1/2 a bushel, and September wheat ended down 18-1/4 cents at $5.07-1/4 a bushel. Corn declined after the US Department of Agriculture rated 70 percent of the US crop in good to excellent condition in a weekly report late Monday, unchanged from the previous week, bucking trade expectations for a slight decline.
“Crop conditions helped to set the overnight tone,” said Don Roose, president of US Commodities in Iowa, adding, “weather is probably less threatening than people thought yesterday.” US soybean ratings were also steady, with 63 percent rated good to excellent. “People get worried about crop condition, downgrades and yields, then you get reports which show things are pretty OK and there are no major issues with the crop,” said Phin Ziebell, agribusiness economist with National Australia Bank.
Additional pressure stemmed from Brazil’s government crop supply agency Conab raising its 2014/15 corn crop estimate to 84.3 million tonnes, up from 81.8 million last month and above the USDA’s figure of 82 million. Grain prices were also curbed by a drop in crude oil and metals after China devalued the yuan to boost its faltering economy. The move raised concerns that a persistently weaker currency will choke off demand in the world’s top commodities consumer.
Traders continued to adjust positions ahead of the USDA’s monthly supply/demand reports on Wednesday. Analysts expect the government to lower its estimates of US yield, production and ending stocks for corn and soybeans, while raising its US wheat stocks forecast. The USDA is also expected to trim its estimate of US soybean acreage following flooding in some areas this spring.