Soft Commodities Price Watch: Grain Futures Down on Improved U.S. Crop Prospects

on Aug 6, 2013
Listen Tuesday, August 6th: Grain futures were lower today, with corn and soybean prices trading at multi-month lows as investors focused on improving U.S. weather and crop prospects.

**Corn Falls to Its Lowest Level Since 2010**
The corn price for September delivery on the Chicago Board of Trade (CBOT) today fell to $4.6563 a bushel, the lowest price for the contract since October 5, 2010 after a crop-progress report added to speculation that the harvest will exceed market expectations.
The U.S. Department of Agriculture (USDA) said yesterday that 64 percent of the country’s corn crop was rated in “good” to “excellent” condition as of August 4, up from the 63 percent in the preceding week and significantly better than the 23 percent recorded in the same week a year earlier. According to the weekly report, nearly 11 percent of the corn crop was in “poor” to “very poor” condition, compared to 50 percent recorded in the same week a year earlier.

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Weather forecasts also weighed on the corn price, pointing at favourable temperatures across most parts of the U.S. Midwest during the next few days and easing concerns over potential crop damage in the country’s leading growing region.
The soybean price for September delivery was also down today, hitting a day’s low of $12.0250 a bushel. The USDA said yesterday that approximately 79 percent of the U.S. soy crop bloomed as of last week, up from 65 percent in the preceding week. The report also showed that nearly 64 percent of the soy crop was in “good” to “excellent” condition as of last week, up from 63 percent a week earlier and significantly higher than the 29 percent recorded in the same week a year earlier.

Elsewhere on the CBOT, wheat for September delivery traded at $6.4413 a bushel, down 0.1 percent. The USDA reported yesterday that nearly 87 percent of the winter-wheat crop was harvested as of last week, up from 81 percent a week earlier and above the five-year average of 86 percent for this time of the year.

**Arabica Down as Brazil Keeps Silent on Coffee Price Support Measures**
Coffee futures declined today after top producer Brazil delayed an expected announcement about price support measures that could potentially include buying coffee directly from producers in order to remove excess supply from the market and combat falling prices. The country’s Agriculture Minister Antonio Andrade said late on Monday that the government needed more time to weigh options about the move. He added that the government might make an announcement on Wednesday.

Arabica coffee for September delivery on the ICE Futures U.S. Exchange traded at $1.1850 a pound, down 0.9 percent. Among other soft commodities, sugar futures for October delivery traded little changed at $0.1656 a pound. The cocoa price for September delivery was unchanged at $2,364 a tonne.
Elsewhere in soft commodities, rubber declined for a second day as a strengthening Japanese currency dented the appeal of yen-based contracts. Speculation that the U.S. Federal Reserve will soon be able to reduce stimulus also weighed on prices. The contract for delivery in January on the Tokyo Commodity Exchange (TOCOM) today dropped as much as one percent to 243.4 yen a kilogramme.


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