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High yield estimates put skids under crop rally

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Forecasts of bumper US crops – higher than current official forecasts – put an end to the strong run in Chicago food commodity prices.

Corn was the worst affected by data from Informa, the analysis group, which pegged America's harvest of the grain this year at 13.0bn bushels, 700m bushels higher than the US Department of Agriculture's latest estimate.

Many analysts have been hoping for a harvest smaller than the USDA is expecting, after the department announced last month that it was reviewing its forecast in the light of rains which may have forced farmers to ditch some late plantings.

However, Informa estimated corn yields coming in at 164 bushels per acre, 10.6 bushels per acre more than the USDA is expecting.

Chicago corn for August stood 3.5% lower at $3.42 a bushel at 16:45 GMT, with new crop contracts showing similar losses.

Soybean yields

For soybeans, Informa estimated a 3.32bn-bushel harvest, 60m bushels more than current USDA thinking.

Yields would come in at 43.5 bushels per acre, 0.9 bushels per acre more than official forecasts.

Again, many traders have been betting on some damage to soybean crops from current hotter weather during the crop's crucial podsetting period.

Soybeans for August, which had appeared on track for a sixth successive day of gains, were 9.5 cents lower at $11.55 ½ a bushel.

New crop beans did marginally better, with the November contract off 4.75 cents at $10.26 ¾ a bushel.

Wheat affected

The declines dragged wheat lower, with Chicago's September contract down 2.9% at $5.26 ¾ a bushel.

European wheats also fell, with London wheat for November down £2.50 at £101.50 a tonne, within an ace of its contract low, and Paris's August contract E3.00 lower at E126.00 a tonne.

Forecasts of a good European crop, in terms of quantity at least, have continued to undermine prices.

By Agrimoney.com

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