Rainy weather around the U.S. Midwest pressured corn futures on Friday, pushing prices to new 34-month lows on increasing expectations for a big crop this fall, traders said.
Soybean futures also were caught up in the downturn on expectations that the upcoming harvest will provide relief to the tight supply situation on the cash market. The new-crop soy contract sank to its lowest level since June 2012, with a wave of technical selling hitting the market after prices fell through key support at their 2013 low.
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The weather outlook reinforced the bearish view on the ag markets even though a late planting left much of the corn and soybean crops well behind schedule and vulnerable to damage if temperatures drop before harvest.
"Frost and other crop concerns are a real risk," said Jason Britt, president of Central States Commodities in Kansas City. "The problem is, it is not going to frost on August 2. With these showers across the Midwest, it tees the ball up for a little better end to the growing season."
Wheat futures edged higher despite the weakness in corn and soybeans, supported by short-covering as well as signs of good global demand. For the week, CBOT corn was down 3.3 percent. The front-month corn contract has shed 32.1 percent during three straight weeks of declines.
Showers were expected in the central U.S. Midwest on Friday night, and frequent thunderstorms were forecast for drier southwestern areas of the Corn Belt next week, Commodity Weather Group said. Widely scattered thunderstorms hit the region on Thursday, with the biggest storms bringing as much as 5 inches of rain in central and southeastern Nebraska, eastern Kansas and west-central Missouri.
Soybeans dropped 1.4 percent this week, their fourth straight losing week, and wheat was up 1.6 percent. Soybeans' streak of negative weeks was their longest since a four-week stretch during September and October 2012. CBOT August soybeans settled down 26-3/4 cents at $13.31 a bushel, while the new-crop November soybean contract dropped 11 cents to $11.81-1/2 a bushel. CBOT September corn was 11-1/2 cents lower at $4.76 a bushel. The front-month corn contract traded as low as $4.75-1/4, its lowest since Oct. 5, 2010. New-crop December corn was down 3-1/4 cents at $4.63-3/4 a bushel. Traders noted unwinding of bull spreads in both commodities.
"Historically in the markets, I have never seen new-crop rally to meet old-crop at the end of the marketing year," said Karl Setzer, an analyst at the MaxYield Cooperative in West Bend, Iowa. "There is nothing here to tell me that this year would be any different."
Two private forecasters, FCStone and Lanworth, this week put the 2013 U.S. corn crop above the current outlook of the U.S. Department of Agriculture.
CBOT September soft red winter wheat was 2-1/2 cents higher at $6.60-1/2 a bushel. Wheat rose sharply early in the session, but prices ran into resistance at the weekly high of $6.67-1/2, first hit on Thursday. Japan bought nearly 90,000 tonnes of U.S. western white wheat in a tender on Thursday, the first purchase of the variety by its top buyer after the discovery of a genetically modified version of the grain in Oregon.
(Editing by Andrew Hay and John Wallace)