Grains: Corn set for 10% weekly decline on improved supply prospects

SLC Agricola SA

09/07/2021 01:59

* Forecasts of cool, wet weather in U.S. Midwest weighs on
prices
    * Expectations of higher corn yields in Brazil add pressure

 (Adds quote in paragraph 4, updates prices)
    By Naveen Thukral
    SINGAPORE, July 9 (Reuters) - Chicago corn futures lost more
ground on Friday with the market poised for a decline of more
than 10% this week on improved outlook for crops in the United
States and Brazil.
    Soybeans and wheat are also set to finish lower this week.
    The most-active corn contract on the Chicago Board of Trade
(CBOT)  Cv1  was down 0.6% at $5.20-3/4 a bushel, as of 0039
GMT. The market is down 10.2% this week, giving up much of last
week's gains.
    "The easing of weather worries in the U.S. Midwest's north
west has taken prices back down to these levels, abetted by what
at least was a very crowded corn long position," said Tobin
Gorey, director of agricultural strategy at Commonwealth Bank of
Australia.
    Soybeans  Sv1  and wheat  Wv1  have given up more than 5%
this week.
    Expectations of cool and wet weather in key U.S. growing
areas are weighing on corn and soybean futures.
    In South America, higher-than-expected yields are adding
pressure on corn prices. Brazil's listed grain grower SLC
Agrícola  SLCE3.SA  has been positively surprised by the first
batches of second corn it harvested, with yields exceeding
expectations even as the crop suffered from bad weather.
    Despite the inevitable loss of yield caused by a drought and
then frosts in some regions, SLC's Director of Operations
Gustavo Lunardi told Reuters in an interview he sees "excellent"
margins for corn given current high prices.
    World food prices fell in June for the first time in 12
months, pushed lower by declines in vegetable oils, cereals and
dairy products, the United Nations food agency said on Thursday.
 urn:newsml:reuters.com:*:nR1N2MF015
    Rome-based FAO also said in a statement that worldwide
cereal harvests would come in at nearly 2.817 billion tonnes in
2021, slightly down on its previous estimate, but still on
course to hit an annual record.
    Commodity funds were net sellers of CBOT corn, soybean,
soymeal, wheat and soyoil futures contracts on Thursday, traders
said.  COMFUND/CBT 
    
    
    

 (Reporting by Naveen Thukral, Editing by Sherry Jacob-Phillips
and Amy Caren Daniel)
 ((naveen.thukral@thomsonreuters.com; +65-6870-3829; Reuters
Messaging: naveen.thukral.thomsonreuters.com@reuters.net))