Corn futures tumbled, as US weather forecasts suggested that the US Midwest will turn drier, allowing the harvest to pick up pace.
The harvest got off to a slow start this year, due to wet weather, and there were fears that if the wet weather persists disease problems could develop.
US harvest progress due to be released this afternoon to show the harvest about 15% complete, compared to an average of 25% at this time of year.
“Harvest activity is expected to pick up pace this week,” said Brent Hasbargen at CHS Hedging.
“This week traders will be closely monitoring harvest progress and actual yield reports coming out of the field,” said Mr Hasbargen.
“Look for harvest progress to ramp up if the weather turns dryer which could add a little pressure to the market,” Mr Hasbargen said.
And that drier weather is on its way, according to the latest forecasts.
“Showers will favour the eastern Midwest over her next few days, but drier weather should prevail over the Central US this week, favouring corn and soybean drydown and harvesting and allowing wetness to ease across the north-western Midwest,” said Kyle Tapley at MDA Weather Services.
The dry weather should continue into the 6-10 day period, but rains should return to the north-western Midwest late in the 6-10 day period,” Mr Tapley said.
US corn export expectations were reported at 1.34m tonnes, compared to 1.30m tonnes last week.
December corn futures finished down 2.3%, at $3.29 a bushel, breaking back below the 20 and 40-day moving average.
Weak export inspections
US export inspections for soybeans were reported at just 383,000 tonnes, compared to 756,000 tonnes last week.
And US farmers are suggesting a very big harvest indeed, ramping up the pressure on prices.
Mr Feltes noted the “ongoing flow of favourable soy yield reports”.
“Reports of big crop yields continue to roll in,” said Tobin Gorey, at CBA.
Pressure on storage space
“Soybeans are being pressured lower as yield numbers continue to be impressive and export inspections for last week were less than stellar,” Mr Hasbargen said.
“Commercial traders selling as they begin to fill their storage space will also pressure to the market,” Mr Hasbargen said.
Soybean harvest progress is expected to be reported at 12%, ahead of the average pace of 9% at this time of year.
Still, there was some support, as the USDA reported export sales of 240,000 tons of soybeans to unknown destination.
November soybean futures finished down 0.9%, at $9.45 ¼ a bushel.
Wheat futures fell as well, with no bullish news to change the narrative of heavy global supplies.
Kim Rugel, at Benson Quinn Commodities noted the “lack of fresh news weighing on wheat”.
“Wheat is still fundamentally bearish as large supplies continue to hang over the market,” Mr Hasbargen said.
“Large global supplies continue to weigh on prices,” he said.
“Buyers are content to buy as they need with little concern for bullish price action.”
The USDA reported export inspections at 875,000 tonnes, compared to 574,000 tonnes in the previous week.
December wheat futures finished down 2.2%, at $3.96 a bushel, breaking back through the 20-day moving average.
Coffee futures rose, as dryness worries continue in Brazil.
Commerzbank noted “insufficient moisture levels which continue to affect key growing areas in Brazil”.
This threatens to hamper blossoming and the development of coffee berries for the next crop.
Commerzbank said that “blossoming is being seriously delayed, according to the Cepea analytical institute, which following falls in production in the last two crops does not bode well for the next crop, either”.
December arabica futures closed up 1.4%, at 153.55 a pound.
November robusta coffee settled up 0.5%, at $1,975 a tonne.
Raw sugar rallies
Sugar futures rallied to put in the highest close in over four years, although they failed to take out Thursday’s session high.
Some support came from a boost to the global deficit forecast from Platts Kingsman, as analysts suggest that Brazilian cane harvesters could see a weak end to this season’s campaign.
(Source – http://www.agrimoney.com/marketreport/pm-markets-grain-futures-fall-back-as-us-turns-drier–3783.html)