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Corn futures hit 2-day low as U.S. crop concerns ease

Published 05/24/2011, 06:24 AM
Futures Pros – Corn futures were down for a second day on Tuesday, as concerns over U.S. crop conditions eased and amid speculation of a slowdown in demand from China, the world’s second largest corn consumer.  

On the Chicago Mercantile Exchange, corn futures for July delivery traded at USD7.5150 a bushel during European morning trade, shedding 0.45%.

It earlier fell as much as 0.8% to USD7.4812 a bushel, the lowest price since May 20.

The U.S. Department of Agriculture said in its weekly crop-progress report that approximately 79% of U.S. corn crops were planted as of May 22, up from 63% a week earlier, as good weather in key corn-growing states allowed farmers to complete their seeding.

In Iowa, the largest U.S. corn-producing state, 98% of the corn crop was planted, up from 92% last week and higher than the five-year average of 94% for this time of year.

According to the U.S. Grains Council, nearly 80% of the crop needed to be planted by May 22, or farmers faced higher risks that yields would fall below the historical average.  

The U.S. is both the world’s largest corn producing nation and the world’s largest exporter of the grain.

Meanwhile, the China National Grain and Oils Information Center, a government grain think tank said that it expected China's 2011 corn output to increase 2.4% from a year earlier to a record 181.50 million tonnes due to increasing acreage and as farmers seek to profit from strengthening prices.

The upbeat forecast could potentially limit imports of the grain by China, the world’s second largest corn consumer.

Elsewhere, wheat for July delivery slipped 0.22% to trade USD8.0062 a bushel, while soybeans for July delivery climbed 0.85% to trade at USD13.8325 a bushel during European morning trade.

Corn is the biggest U.S. crop, valued at USD66.7 billion in 2010, followed by soybeans at USD38.9 billion, government figures show. Wheat was fourth at USD13 billion, behind hay.

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