Corn fell on high corn plantings while wheat prices edged lower on welcome rain forecasts.
Exporters sell 120,000 metric tons of corn for delivery to Mexico during the 2017/2018 marketing year. -USDA
US soybean prices dropped below $10 a bushel to hit a two-month low on Tuesday, dragged down by expectations of record South American production in a global market that is already amply supplied. Increased SA production comes as US farmers are expected to plant more soybeans next season, adding to global inventories. Private analytics firm Informa Economics raised its 2017 US soybean plantings forecast to 88.7 million acres, from 88.647 million in January.
The US Department of Agriculture believes South America is on the verge of harvesting a monster corn crop, but the agency’s past prediction tendencies suggest that the record targets it has set could still be too low.
Last Thursday, USDA revised its forecast for 2016/17 Brazil corn output to 91.5 million tonnes, some 6 percent greater than last month’s figure. The US agency also increased the Argentine crop to 37.5 million tonnes, a 3 percent rise from February. This may not be the best news for corn bulls, as Chicago prices have been feeling pressure in the face of the likely record world corn supply this year. The world will look to Brazil and Argentina to supply 37 percent of world corn trade this year.
The dollar rose before the start on Tuesday of a Federal Reserve policy meeting expected to raise US interest rates. The Dollar Index which measures the dollar against six other major currencies, rose 0.3 percent. A Fed rate rise on Wednesday is seen as all but certain and investors will focus on new economic forecasts and any clues to how many rate hikes can be expected this year. While higher rates would raise companies’ costs, they are also seen as evidence of economic recovery.
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