June 24, 2014
Corn price sees biggest drop in more than five weeks
The price of corn has recorded its largest drop in more than five weeksdue to concerns overthe excessive rain in parts of the US while expectations are that output will reach a record figure.
Meanwhile, wheat fell to a four-month low.
Corn for December delivery lost as much as 1% to US$4.3825 a bushel on the Chicago Board of Trade. Prices climbed to US$4.5725 on June 23, the highest level since June 6, due to the concern that crop conditions will deteriorate amid excessive rain. The grain later fell, closing 2.1% lower for the biggest drop since May 15.
Futures have decreased 20% in the past year as the USDA predicts that farmers will harvest a record 13.935 billion bushels in the season starting September 1. Rain should be more limited in the US states of Minnesota and northwest Iowa this week, allowing wetness to ease, according to a report by MDA Information Systems LLC. Rain in southern and east-central areas of the Midwest will maintain moisture for favourable corn and soybeans growth, it said.
"The market appears unable to decide whether the wet conditions in the parts of the US cornbelt will overall be positive or negative for US yields," an email note by analysts from the Australia & New Zealand Banking Group Ltd. read. Crop conditions "deteriorated slightly due to excess rainfall in some areas," the analysts said.
About 74% of the crop was rated in good or excellent condition as of June 22, down from 76% a week earlier, the USDA said on June 23.
Wheat for September delivery declined as much as 0.9% to US$5.835 a bushel, the lowest for a most-active contract since February 11, before trading at US$5.85. Soybeans for delivery in November slided to 0.4% at US$12.29 a bushel.