Corn Heads for Biggest Monthly Drop Since June on Sowing in U.S.

May 29, 2014 3:26 pm ET

May 29 (Bloomberg) -- Corn futures fell, heading for the biggest monthly loss since June, as U.S. planting neared completion and prospects improved for early crop development. Wheat also fell, while soybeans gained.

U.S. farmers planted 88 percent of the corn crop as of May 25, up from 73 percent a week earlier and matching the five-year average, the U.S. Department of Agriculture said. Sowing in Illinois, the biggest producer after Iowa, was 95 percent complete with 67 percent of the crop rated in good or excellent condition. Warm, wet weather in the next two weeks will boost early growth, T-Storm Weather said in a report today.

“Farmers are finishing up planting, and rain and warm temperatures means the crop will get off to a great start,” Brian Basting, a market analyst for Advance Trading Inc. in Bloomington, Illinois, said in a telephone interview. “The potential is there for very good yields.”

Corn futures for July delivery fell 0.6 percent to close at $4.695 a bushel at 1:15 p.m. on the Chicago Board of Trade, after reaching $4.665 yesterday, the lowest since March 4. The grain has slumped 9.5 percent in May, after surging 23 percent in the previous four months.

Prices also declined on speculation that world inventories will rise with improving global weather conditions, Basting said.

World production of corn will be 955 million metric tons, 0.5 percent larger than last month’s forecast, the International Grains Council said. Global inventories before the start of the 2015 harvest will rise to 172 million tons, compared with a previous forecast of 163 million, the IGC said.

Wheat futures for July delivery dropped 1 percent to $6.325 a bushel, after touching $6.2975, the lowest since March 4. The most-active contract is headed for the biggest monthly decline since September 2011.

Soybean futures for July delivery rose 0.1 percent to $14.99 a bushel. The price is down 0.9 percent this month after rising 18 percent the prior three months. Fifty-nine percent of U.S. crops were planted as of May 25, ahead of the five-year average pace, USDA data show.

--With assistance from Whitney McFerron in London and Phoebe Sedgman in Melbourne.