Grain futures edged lower on Monday with corn dropping to the lowest in more than a week as weather forecasting models called for favorable weather in South America to aid crops after recent hot and dry conditions.
On the Chicago Board of Trade, corn futures for settlement in March lost 0.37% by 10:29 GMT to trade at $4.2563 per bushel. Prices fell to days low of $4.2538, the weakest level since December 19th, while days high stood at $4.2663 a bushel. The grain added 0.1% on Friday but settled the week 1.5% lower, extending its annual decline to 39%, the biggest loss on record.
Corn fell after weather forecasts called for more favorable conditions in South America after a recent hot and dry trend which hampered crops. DTNs December 27 forecast called for cooler weather and increasing rain chances this week, especially over Brazil and Argentina. The agency reported that high temperatures in Argentina and Brazils Rio Grande do Sul state will continue for a few days before giving way to lower readings.
Paul Deane, an analyst at Australia & New Zealand Banking Group Ltd. in Melbourne, said, cited by Bloomberg: “The Argentina situation has been of more concern of late. If the weather outlook is a bit better, then that may pressure prices.”
DTN also reported that there will be no significant concern for corn and sugarcane in South Africas growing regions. Episodes of scattered showers and thundershowers coupled with higher temperatures will favor developing crops and planting corn, the agency said.
The grain is set to post its worst annual performance on record as global output is projected to surge to 964.3 million tons in the 2013-2014 season, boosted by record production in the US, the worlds top producer.
Corn recently drew support on signs of increasing demand for US shipments. Exporters sold 1.48 million tons of corn in the seven days through December 19, up 79% from a year earlier, the USDA said last week. Brazil is this years top shipper but is set to be overtaken by the US during the next season.
Elsewhere on the grains market, soybeans futures for settlement in March fell by 0.65% to $13.0500 per bushel by 10:18 GMT. Prices held in a range between days high of $13.1588 and a one-month low of $13.0488 a bushel. The oilseed added 0.9% on Friday but settled the week 0.5% lower. Prices are down 6.9% this year.
Wheat falls as well
Wheat also declined on Monday, extending its annual decline. The March contract slid 0.26% to $6.0663 per bushel by 9:58 GMT and held in a daily range between $6.0900 and $6.0663 per bushel. The grain rose by 0.4% on Friday but settled the week 0.9% lower, adding to the previous two weeks combined loss of 5.8%. Prices are down 22% this year.
Wheat edged lower as weather forecasting models called for suitable weather conditions over most of the major growing areas. DTN reported on December 27 that there is no threat of damaging cold weather in both Europe and the US. The well-established wheat crop is now dormant and will remain so, the agency said.