Corn Slumps to 12-Week Low on U.S. Planting Progress; Soy Drops

May 27, 2014 3:36 pm ET

May 27 (Bloomberg) -- Corn futures dropped to the lowest since March and soybeans posted the biggest decline in almost four weeks on signs that planting is accelerating in the U.S., the world’s biggest producer of the crops.

About 88 percent of the corn crop was sown as of May 25, up from 73 percent a week earlier, and soybean seeding jumped to 57 percent from 33 percent, according to a Bloomberg survey of analysts. The government will update issue an update later today. Warm, wet weather in the next two weeks will aid plant development, according to Commodity Weather Group LLC in Bethesda, Maryland.

“The tone of the markets has shifted to one looking for good crop production after earlier planting delays,” Ted Seifried, the chief market strategist at the Zaner Group LLC in Chicago, said in a telephone interview. “We have an ideal mix of weather to get the crops off to a great start.”

Corn futures for July delivery fell 1.7 percent to close at $4.6975 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price touched $4.6925, the lowest for a most-active contract since March 4. Futures for delivery in December after the harvest dropped 2 percent to $4.6575, the lowest settlement since Feb. 27.

Soybean futures for July delivery dropped 1.8 percent to $14.8875 a bushel, the biggest drop since May 1. On May 22, the price reached an 11-month high of $15.3675, partly on record demand from China, the top consumer.

Farmers may increase sales of corn and soybeans after wrapping up planting, Seifried said.

In the week ended May 20, hedge funds and other large speculators cut bets on a corn rally by 19 percent to 207,572 futures and option contracts, government data show. On April 1, bullish wagers rose to the highest since December 2012.

Investors reduced bets on higher soybeans to the lowest since January, the latest data show.

Wheat futures for July delivery fell 1.8 percent to $6.41 a bushel. Earlier, the price touched $6.4025, the lowest since March 11. This month, the grain has dropped 11 percent, heading for the biggest decline since September 2011.

--With assistance from Whitney McFerron in London.