US corn, wheat post falls on debt talks, forecast rain

US grains futures fell around one per cent on Monday, hurt by forecasts for rain this week in the heat-stricken US Midwest and by concern over a seeming stalemate in US debt talks.
Agricultural commodity markets are at the mercy of weather in the United States as corn and soybean crops mature, as well as the US debt talks that are unsettling equity and currency markets.
"We’re down across most of the risk assets today with oil being lower and that in turn is pushing corn and wheat lower while soybeans are also a bit weaker," said Luke Mathews, an agricultural commodities strategist at Commonwealth Bank of Australia.
He said some of the risk premium on weather concerns was being taken out the market.
"In the corn market, in particular, forecasts are for some thunder storms across the US Midwest and cooler weather that will aid pollination," he said.
Sizzling temperatures last week raised fears about yield potential of the corn crop being reduced in the US Midwest and causing damage to soybean crops in the Delta region.
The US Department of Agriculture (USDA) will release its weekly crop progress at 2030 GMT which will provide an indication on how US crops fared during the heat wave.
Scattered rain is forecast this week that could help some crops recover.
Chicago Board of Trade (CBOT) corn for December delivery, the harvest contract, fell 1.2 per cent to $6.77 per bushel by 1137 GMT after rising 1.9 per cent on Friday. The spot month September contract was down 1.1 per cent at $6.82-1/4.
Soybeans for August delivery fell 0.96 percent to $13.67 per bushel while the actively traded November contract dropped 0.94 per cent to $13.68 after closing flat on Friday.
Thunderstorms and showers were forecast for the Midwest corn and soybeans belt over the next 10 days while temperatures were expected to range from average to above normal, according to Telvent DTN meteorologist Joel Burgio.
In Russia and Ukraine showers and cooler temperatures during the weekend helped ease stress to corn after hot and dry weather last week.
Burgio said the region was likely to see more hot and dry weather this week.
September wheat was down 1.1 per cent at $6.84-3/4 per bushel following a 2.2 per cent surge on Friday.
"Wheat is falling largely on the back of corn as the fundamentals for wheat are less supportive – it has been riding very much on corn’s coattails," said Mathews.
Wheat is also under pressure from the return of Russian wheat to export markets after a near year-long absence because of a severe drought.
"Russia export prices have eased considerably and are undercutting those of other exporters," Rabobank said in a report on Monday.
In Europe wheat prices edged higher in a slight rebound after three days of fall but volumes were thin as traders waited to have a clearer picture on the quality of the harvest hit by heavy rainfall in key countries such as France.
The benchmark November wheat contract on Euronext milling wheat futures was 0.4 per cent or €0.75 at €193.75 a tonne by 1143 GMT.

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