Chicago corn, wheat and soybeans fall as traders await USDA data

By Renee Hickman

Soybeans, corn and wheat futures dropped on Monday as traders adjusted positions before closely watched U.S. planting and stocks data while monitoring forecasts of a hot spell in the U.S. Midwest.

The U.S. Department of Agriculture's acreage and quarterly grain stocks reports on Tuesday are among the most closely watched publications in grain markets, providing clues in particular to U.S. corn and soybean supply prospects for the coming season.

Market participants on average expect the USDA to revise down its corn area estimate and increase its soybean planting view, reinforcing a shift from corn to soybeans.

"There’s nothing bullish," about those expectations," said Arlan Suderman, chief commodities economist at StoneX, "but these are already largely priced into the market."

"Bearish surprises could add selling momentum, while bullish surprises could reverse sentiment," he said.

July corn (CN26) on the Chicago Board of Trade settled down 11-1/2 cents at $4.10-1/4 a bushel, after setting a contract low at $3.98-1/2 a bushel.

CBOT wheat CBOT:ZW1! lost 10 cents to $5.79-3/4 a bushel while CBOT soybeans CBOT:ZS1! ended 17-1/4 cents lower at $11.39 a bushel.

Grain futures came under pressure last week as a dollar rally and falling crude oil fueled selling by investment funds in the run-up to the USDA's June 30 data.

Monday's weakness in grains came despite an easing in the dollar index TVC:DXY and a steadying of crude oil ICEEUR:BRN1! after tit-for-tat strikes by the U.S. and Iran that underscored the fragility of their interim peace deal.

Soybean and corn prices often track crude oil because of their role in biofuel production.

Hot weather in much of the U.S. Midwest this week is being monitored, with expectations temperatures will peak in the next few days, according to forecaster Commodity Weather Group. But the appearance of showers, along with temperatures tapering off after midweek, is expected to limit crop stress.

Swift harvest progress in the U.S., along with strong production prospects in the Black Sea export region, was also weighing on the wheat market, taking attention away from a severe heat wave in Western Europe over the past week.