Corn and soybeans extend losses as favorable crop weather improves outlook

Corn and soybean prices on the Chicago Board of Trade fell again on Thursday, hitting multi-month lows as favorable weather conditions across US growing regions continued to fuel selling pressure, according to market analysts.

Wheat also edged lower as improved rainfall across the US Plains and the start of the harvest season added to supply-side pressure.

The most-active CBOT corn contract fell 1.1% to $4.26¾ per bushel by 10:57 GMT, after touching its lowest level since February 20 for the second consecutive session.

Soybeans declined 0.6% to $11.47½ per bushel after reaching their weakest level since April 8, while wheat slipped 0.1% to $5.86½ per bushel after hitting its lowest level since April 14. All three contracts were on track for a fifth consecutive daily decline.

Andrey Sizov, head of agricultural consultancy SovEcon, said that broadly favorable expectations for US corn and soybean crops have encouraged investment funds to increase selling activity after building massive long positions in major crops earlier this year, positions that had approached record levels.

Sizov added that “Chinese silence” regarding purchases of US crops is also weighing on prices from the demand side.

Washington previously announced that Beijing had pledged during a mid-May summit to purchase $17 billion worth of US agricultural products annually, in addition to an earlier commitment to import soybeans. China confirmed that it had agreed to expand agricultural trade but provided no additional details.

Market participants are awaiting the US Department of Agriculture’s weekly export sales report on Thursday for fresh indications of demand trends.

Investors are also monitoring the discovery of a new case of New World screwworm infestation—a flesh-eating parasite—in a calf in Texas. The development could have implications for the US cattle herd and, consequently, feed demand.

Meanwhile, lower oil prices on Thursday, following the Israel-Lebanon ceasefire agreement and renewed hopes for a broader Middle East peace deal, removed one source of support for crops such as corn and soybean oil that are used in biofuel production.

However, grain markets have become less sensitive to energy price fluctuations in recent weeks, as seasonal crop-supply factors have once again become the dominant market driver.

In the wheat market, attention remained focused on abundant global supplies, as the US winter wheat harvest gets underway and production expectations continue to improve in Russia, the world's largest wheat exporter.