May 21, 2013
US corn sinks to 6-week low ahead of USDA reports
US corn futures sank to a six-week low on Monday as traders moved out of bullish bets ahead of US government reports that will give updates on crop damage from the worst US drought in half a century.
The US Department of Agriculture's monthly supply-demand and crop production reports on Wednesday could provide insight into whether this summer's rally in corn and soybean prices to record highs can run longer.
With people around the world worried about higher food prices, market watchers will scrutinize the latest reports' yield and production estimates.
Traders said there was a better chance for a bullish surprise for soybean futures than corn in the reports because they felt they already had a good handle on damage to the corn crop.
"There's a little more fear for the longs in the market that this report is not going to give them anything that they want for corn, but it could for beans," said Tim Hannagan, grain specialist for Alpari, referring to traders who are betting on higher grain prices.
Chicago Board of Trade new-crop December corn tumbled 2 percent to $7.83-1/4 a bushel. November soy lost 1 percent to $17.18-1/2 a bushel, while December wheat slid 1.7 percent to $8.89-3/4 a bushel.
Commodity funds sold an estimated net 8,000 contracts of corn futures on Monday, trade sources said. They sold 3,000 wheat and 6,000 soybeans.