Soft Commodities Price Watch: U.S. Plantings Data Drags Corn to 31-Month Low

on Jul 1, 2013
Listen Monday, July 1st: Grain futures have been mixed today, with corn futures falling to their lowest level in two and a half years after the U.S. Department of Agriculture (USDA) estimated that farmers would plant more corn this year than previously expected.

Market analysts had expected the USDA to cut its forecast for corn area to 95.3 million acres from the March estimate of 97.3 million acres. Yet the latest report, released on Friday, showed that corn acreage will total 97.4 million acres in the current market year, the most since 1936 and up slightly from last year. The forecast has weighed on the corn price, which plunged nearly five percent on Friday.

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Today corn has continued to slump and as of 12:44 GMT futures for September delivery on the Chicago Board of Trade (CBOT) stood at £5.4513 a bushel, down 0.36 percent on the day. Earlier, the contract fell by as much as one percent to hit a session low of $5.4163 a bushel, the weakest level since November 23, 2010. CBOT corn for December delivery has also declined considerably, standing at $5.0650 a bushel, down 0.88 percent on the day.

Elsewhere on the CBOT, the wheat price for September delivery was 6.5925 a bushel, up 0.23 percent on the day. The contract traded in a range between a daily high of $6.6375 a bushel and a session low of $6.5288 a bushel, which was the lowest level since June 20, 2012.
On Friday, the wheat price fell almost three percent after the USDA said acreage was expected to hit a four-year high of 56.53 million acres in the current market year. The Agriculture Department also raised its estimate of spring-wheat plantings to 12.3 million acres.

In contrast with other grains, soybeans edged slightly higher following the release of the U.S. sowings data, as the USDA raised its estimate of area put to soybeans to 77.7 million acres this year, up one percent from last year but below expectations for an increase to 78.02 million acres.
The soybean price for August delivery on the CBOT was $14.4288 a bushel, up 0.8 percent on the day. The front-month contract held in a range between a session low of $14.2063 a bushel and a session high of $14.4538.

This week, corn and soybean traders will continue to pay close attention to weather forecasts for grain-growing regions in the U.S. Midwest, while wheat traders will monitor temperatures in the Great Plains-region. Market players will also expect the release of the USDA’s weekly update on planting progress later today.
**Sugar Climbs Before July Expiry, Rubber Reflects China Woes**
The sugar price has climbed in New York today, as investors readjusted positions ahead of the expiry of the July contract. Contract expiration often leads to volatile sessions as market participants look to close out positions or reposition their portfolios.
On the ICE Futures U.S. Exchange, sugar futures for October delivery traded at $0.1700 a pound, up 0.47 percent on the day. White sugar for October delivery was 0.3 percent higher at $486 a tonne on NYSE Liffe in London.
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ICE Arabica coffee for September delivery traded at 1.2110 a pound, up 0.58 percent on the day, further rebounding from a three-year low of $1.1717 a pound hit on June 20 amid concerns of ample supply in top grower Brazil. As of the same time, the cocoa price for September delivery fell 0.8 percent to $2,147 a tonne in New York. The contract slid 1.1 percent to £1,442 a tonne in London.
Among other soft commodities, the rubber price in Tokyo declined for the first time in three days after manufacturing expanded at the slowest pace in four months in China, the largest consumer of the commodity used in tires. The December futures slipped as much as one percent to 233.9 yen a kilogram ($2,356 a metric tonne) on the Tokyo Commodity Exchange (TOCOM). The contract lost 14 percent last quarter, the biggest decline in a year.
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