Band Karl Plume
CHICAGO, July 12 (Reuters) – U.S. grain and soybean futures extended losses on Tuesday after the U.S. Department of Agriculture (USDA) raised supply forecasts for major crops and lowered some demand expectations in a monthly report.
The agency’s supply and demand data added pressure on grain stocks already weighed down by the collapse of external market influences, including the sharp drop in energy prices and a stronger U.S. dollar. .
The USDA on Tuesday cut its forecast for U.S. corn demand for the current season and raised its forecast for domestic corn production. It also cut its forecast for the country’s soybean crop.
The bearish data overshadowed lingering concerns about heat and drought stressing crops in the US Midwest.
“They’re putting weather and supply issues on the back burner. The USDA has helped fuel this demand-driven disruption,” said Mike Zuzolo, president of Global Commodity Analytics.
“Trade was looking to destroy demand, and they got it,” he said.
Chicago Board of Trade December Corn CZ2 fell 45 cents to $5.84 a bushel at 12:29 p.m. CDT (1729 GMT), while November soybeans SX2 fell 58-3/4 cents to $13.46-1/4 a bushel. CBOT September wheat WU2 fell 35 cents to $8.21-1/2 a bushel.
Prior weakness was fueled by a fresh 20-year high for the dollar, making commodities valued in the currency more expensive, and weather maps suggesting rain for the US Midwest in the coming week.
Wheat added to Monday’s steep losses, with news that talks will take place on Wednesday between Ukraine, Russia, Turkey and the United Nations over war-disrupted Ukraine’s grain exports also weighing in the market, traders said.
Grain markets were also digesting the USDA’s weekly report on crop progress and conditions released Monday evening, which showed lower than expected ratings for corn and soybeans.
However, weather forecasts showing showers in part of the Midwest this week have tempered concerns about pollinator corn stress.
(Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Marguerita Choy)
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