Chicago corn and soybean futures drop on better-than-expected weather

13:34, July 20, 2010      

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Chicago corn futures retreated the most in seven weeks, and soybean dropped the most in near 4 weeks on Monday, as the rains during weekend boosted needed soil moisture in U.S. Midwest and warm and wet weather in the next five days looks less negative than analyst expected last week. Wheat extended losses on profit-taking.

September wheat retreated 5.0 cents, or 0.9 percent, to 5.8225 U.S. dollars per bushel. December corn plunged 13.25 cents, or 3.3 percent, to 3.94 dollars per bushel, the largest drop for a most- active contract since May 28. November soybean dropped 13.0 cents, or 1.3 percent, to 9.72 dollars per bushel, the biggest decline since June 23.

Trader noted that moderate to heavy rains is expected this week in parts of U.S. Corn Belt, which would further add soil moisture, and revive the corn and soybean crops which had been suffered from excessive heat and drought last week.

"Overall we have some profit-takings today across the board for soybeans, corn, and wheat. The market has rallied for the last 2 weeks and it seems to have been exhausted at this time. Certainly the spot month projections for wheat, corn and soybeans are much lower than where the market was. So we did have a sell-off to that point," said Virginia McGathey with McGathey Commodities.

Trader mentioned that wheat has received some support from the weaker dollar as well as a large wheat sale to Iraq that included U.S. wheat, as higher cost made U.S wheat export less competitive than Russian and European wheat in the global markets. Wheat pared earlier gains and closed lower, pressured by the sharp decline in corn prices and profit-taking after wheat surged to 13-month high last week.



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