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Corn and soybeans drop as U.S. crop weather outlook improves

06/14/2021 | 02:15pm EDT

CHICAGO, June 14 (Reuters) - U.S. corn futures fell by about 4% on Monday on a mix of technical selling and forecasts for improving weather in the Midwest as the crop approaches a key growth phase.

Soybeans fell more than 2% and wheat followed the weaker trend as the U.S. winter wheat harvest got under way.

Chicago Board of Trade (CBOT) July corn futures were down 28 cents at $6.56-1/2 a bushel at 12:53 p.m. CDT (1753 GMT), with new-crop December corn down 29 cents at $5.80-3/4.

CBOT July soybeans, meanwhile, lost 36-1/2 cents to $14.72 a bushel and July wheat was down 6 cents at $6.74-3/4 a bushel.

Corn posted the biggest declines on a percentage basis.

"The ags sold off with gusto overnight after weekend weather models flipped cooler and wetter for many key crop production areas of the United States," Arlan Suderman, StoneX chief commodities economist, wrote in a note to clients.

Some analysts saw Monday's declines in grains as follow-though selling after weak closes on Friday in CBOT corn and soyoil futures. Commodity funds hold sizeable net long positions in both commodities, leaving the markets vulnerable to bouts of long liquidation.

Futures fell despite trade expectations that the U.S. Department of Agriculture will flag a decline in U.S. crop ratings in its weekly report due later on Monday, reflecting stress from a hot spell last week.

Analysts surveyed by Reuters on average expected the USDA to rate 69% of the U.S. corn crop in good to excellent condition, down 3 percentage points from the previous week, and 65% of the soybean crop as good to excellent, down 2 points.

Additional pressure stemmed from a Reuters report that said the U.S. could scale down biofuel blending in fossil fuels, possibly cutting demand for corn and soy-based blending ingredients.

However, the market is awaiting confirmation and further detail, given that environmental protection is a key element of the Biden administration's strategy.

CBOT July soyoil fell 1.7% and Malaysian palm oil fell nearly 8% on Monday.

(Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore Editing by David Goodman)

ę Reuters 2021
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