Corn Posts Longest Slump in Six Months on U.S. Supply Outlook

May 20, 2014 3:52 pm ET

May 20 (Bloomberg) -- Corn futures fell, capping the longest slump since November, on speculation that beneficial weather will boost crops in the U.S., the world’s biggest producer. Soybeans and wheat declined.

Warm, dry weather in the next six days will aid corn seeding from North Dakota to Ohio, Commodity Weather Group LLC said in a report. Planting was 73 percent completed as of May 18, up from 65 percent a year earlier, U.S. Department of Agriculture data showed yesterday. On May 9, the agency forecast that the harvest will rise to a record in 2014.

“Weather looks good for farmers to make excellent progress finishing up planting this week,” Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago, said in a telephone interview. “The warmer temperatures will help corn plants to get off to a very good start.”

Corn futures for July delivery dropped 0.8 percent to close at $4.735 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price touched $4.73, the lowest for a most-active contract since since March 4. The grain fell for a fifth straight session, the longest slump since Nov. 7.

There is at least a 65 percent chance of El Nino weather conditions developing later this year, according to the U.S. Climate Prediction Center. That pattern probably will lead to favorable moisture for Midwest crops without sustained heat, Commodity Weather Group in Bethesda, Maryland, said yesterday in a report.

“The market is locking in on the idea that El Nino will lead to a big U.S. crop and lower prices,” Archer’s Grow said.

Wheat futures for July delivery fell 0.6 percent to $6.705 a bushel. Earlier, the price climbed as much as 1.7 percent. Yesterday, the grain rose less than 0.1 percent, ending an eight-session slump, the longest since July.

Soybeans dropped 1 percent to $14.6975 a bushel. Earlier, the oilseed reached $15.01, the highest since May 1.