Corn, Soybeans Decline as Cool, Wet Weather Boosts U.S. Yields

By Jeff Wilson
July 24 (Bloomberg) -- Corn fell, capping a seventh straight weekly decline, and soybeans dropped on expectations that cool weather and rain will boost yields in the U.S., tempering the effects of planting delays.
The Midwest will be mostly cool and wet over the next 10 days, with little stress on plants, John Dee, president of Global Weather Monitoring in Mohawk, Michigan, said today in a report. Warmer weather beginning Aug. 5 should help corn and soybeans develop, said Allen Motew, a meteorologist for QT Weather in Chicago. The U.S. is the largest grower and exporter of both crops.
“With the cool temperatures and rain somewhere every second or third day, the weather has been stress-free for the crops,” said Dan Cekander, a Newedge USA LLC senior grain analyst in Chicago. “Warmer weather in August would be beneficial for pushing the crops toward maturity,” boosting production, he said.
Corn futures for December delivery fell 11.5 cents, or 3.4 percent, to $3.2725 a bushel on the Chicago Board of Trade, capping a weekly drop of 1.3 percent. The price has declined 20 percent this year, reaching a seven-month low of $3.1475 on July 22.
Soybean futures for November delivery fell 17 cents, or 1.8 percent, to $9.15 a bushel. The most-active contract fell 0.9 percent this week and 6.6 percent this year.
Farm Survey
Prices climbed yesterday on speculation that a U.S. farm survey next month will show fewer acres were planted with corn than the government estimated in June, Cekander said.
The U.S. Department of Agriculture said July 22 it will survey growers to measure the impact of cold, wet weather on Midwest planting, increasing speculation that grain output may be lower than forecast.
The USDA may cut projections for corn by 500,000 acres and raise soybeans acreage by 200,000, Cekander said. Poor weather led farmers in parts of southern Illinois and Indiana to abandon fields for the season, Cekander said.
Recent condition ratings for both crops were the best since 2004, according to the USDA. About 67 percent of soybeans were rated good or excellent as of July 19, up from 66 percent a week earlier, the department said this week. An estimated 71 percent of corn got top ratings, unchanged from a week earlier.
“Higher corn yields can offset a drop in acres,” Cekander said. “If you don’t stress the crops in August and there is an extended growing season for soybeans to reach maturity, yields can be high.”
Corn is the biggest U.S. crop, valued at $47.4 billion in 2008, with soybeans second at $27.4 billion, government figures show.
To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net Last Updated: July 24, 2009 15:58 EDT