U.S. corn futures fell 3.7 per cent on Monday, their biggest drop in more than a month, on forecasts for warm and dry weather that will allow U.S. farmers to rapidly plant crops during the next week, traders said.
Soybeans also fell on expectations that farmers will be able to ramp up their planting soon, while wheat dropped on spillover weakness from corn prices.
"The trade has ideas that we are actually going to get the crops planted," said Bill Gentry, a broker with Risk Management Commodities. "Rains that were forecast during the weekend were less than expected and guys actually started running, getting some seeds in the ground. That progress is weighing on the market."
Signs of weakening export demand for U.S. corn and wheat added further pressure to grains.
Chicago Board of Trade July corn futures closed down 24-3/4 cents at $6.36-1/2 a bushel, falling through key technical support at the 30-day moving average (all figures US$). It was the biggest drop in percentage terms for the corn market since prices fell 7.6 per cent on April 1.
"I have seen a lot of planters in the fields today, talked to a lot of guys who are rolling," said Brian Hoops, president of Midwest Market Solutions. "Everybody knows that we could have a pretty decent window (of good weather) here. It all looks pretty good for planting."
CBOT July soybeans were 18 cents lower at $13.69-1/4 a bushel, while July soft red winter wheat dropped 18-1/4 cents to $7.02-3/4 a bushel.
Corn planting was off to its slowest start since 1984 due to rain throughout the past month that has muddied fields and kept farmers on the sidelines.
The sluggish pace had raised fears that corn yields will be smaller than expected at harvest, concerns that were alleviated by the latest weather forecast.
Analysts were expecting a U.S. government report on Monday afternoon to show that corn planting was 15 per cent complete as of May 5, up 10 percentage points from a week ago but still the slowest in 29 years. Soybean planting was seen four per cent done, the slowest early May reading since 1996.
But if the forecasts are realized, the weekly progress would be the best of the year. Analysts were focused on forecasts for drier weather that will allow even more farmers to access their fields in the coming days.
"There has been a lot of premium built in (to) corn because of planting delays," said Brett Cooper, a senior markets manager at INTL FCStone Australia. "There is improved weather for corn now and once farmers get on they can plant very quickly."
Rainfall will slow corn planting in the western and southern Midwest this week while drier weather in the north should help boost seedings, said Kyle Tapley, meteorologist for MDA Weather Services.
Drier weather across the U.S. Corn Belt from Saturday through at least Wednesday should give farmers an opportunity to plant rapidly.
"The biggest news is the six- to 10-day is trending much drier, not much rain at all," Tapley said.
The U.S. Agriculture Department said on Monday morning that weekly export inspections of corn fell to 6.506 million bushels from 11.647 million bushels last week, below forecasts for 10 million to 13 million bushels.
Wheat inspections of 16.639 million bushels also came in below trade expectations. Analysts were expecting wheat export inspections of 23 million to 27 million bushels.
-- Mark Weinraub
is a Reuters correspondent covering grain futures in Chicago. Additional reporting for Reuters by Sam Nelson in Chicago and Colin Packham in Sydney.