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Corn futures fall to 1-week low as U.S. crop concerns ease

Published 06/15/2011, 06:00 AM
Investing.com – Corn futures were down for a third day on Wednesday, falling to a one-week low as favorable weather conditions in key U.S. corn growing regions helped improve U.S. crop conditions last week.

On the Chicago Mercantile Exchange, corn futures for July delivery traded at USD7.5175 a bushel during European morning trade, shedding 0.31%. 

It earlier fell to USD7.5125 a bushel, the lowest price since June 8.  

The U.S. Department of Agriculture said in its weekly crop-progress report on Tuesday that approximately 99% of U.S. corn crops were planted as of June 12, up from 94% a week earlier, as favorable weather in key corn growing states allowed farmers to complete their seeding.

100% of the corn crop was planted in Iowa and Nebraska, the two largest U.S. corn-producing states, while 99% of the crop was planted in Illinois, the third biggest corn-grower in the U.S.

The report showed that approximately 69% of U.S. corn crops were in ‘good’ or ‘excellent’ condition as of last week, up from 67% in the previous week and slightly above the five-year average.

The increase represented a turnaround from earlier in the corn-planting season, when excessive rains across the U.S. Great Plains threatened crop production.

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

A stronger U.S. dollar also weighed on prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.7% to trade at 75.33, after earlier rising to 75.39, a two-week high.

A stronger dollar reduces the appeal of U.S. crops to overseas buyers and makes commodities less attractive as an alternative investment.

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.

Elsewhere, wheat for July delivery edged 0.1% higher to trade USD7.3275 a bushel, while soybeans for July delivery added 0.12% to trade at USD13.7025 a bushel during European morning trade.

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