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Grain prices near record lows due to supply pressure

Chicago corn fell on Wednesday, but remained near the contract lows. The U.S. Midwest is expected to enjoy favorable weather conditions for the remainder of the year, which will increase the chances of a bumper crop.

Chicago Board of Trade September corn was down 0.4% to $4.04-1/2 per bushel at 1132 GMT. It held near the contract low of $2.00-1/4 on Tuesday. New-crop futures for December were down 0.5% at $4.20. This was also just off the lows of Tuesday, which were $4.16-1/4.

The U.S. Department of Agriculture surprised the market in a report on Monday, which showed better-than-anticipated corn crop conditions that were the best since 2018 for the time of year.

As corn crops approach the critical pollination phase, traders see few threats as a result of a combination of showers and warmer weather.

One agricultural broker said, "Corn prices have dropped as the strong crop ratings in the U.S. and favorable weather conditions will continue to exert pressure on prices."

The U.S. is experiencing excellent growing conditions as Brazil, a rival exporter, harvests what some analysts predict will be an unprecedented second corn crop.

The CBOT soybeans that were most active rose by 0.6%, to $10.33-1/4 a bushel.

The market for soybeans has also been impacted by the expectation of abundant supplies, as prices have fallen to their lowest level since April.

The oilseed price has been stable since Tuesday. Traders say it is due to the rising prices of soyoil after the U.S. Senate passed a bill to limit biofuel credits for North American feedstock.

Biodiesel is commonly made from soyoil.

A European trader stated that "Soyoil has rallied due to the fact that foreign feedstocks will not get subsidies" in relation to the biofuel measure.

Canola futures in Canada and CBOT both rose 1.8%, while soyoil futures on the CBOT increased by 1.5%.

After reaching a week-high, wheat futures on the CBOT edged up by 0.1% to $5.49-3/4 per bushel.

The approaching U.S. Investors have been encouraged to adjust their long positions in wheat due to the Independence Day holiday.

The wheat market was still dominated by ample supplies, as U.S. growers were progressing with harvest work. Crops in Europe and Black Sea regions are expected to be large despite the harsh weather conditions including the heatwave that hit western Europe last week. Reporting by Gus Trompiz from Paris and Naveen Thupkral from Singapore; editing by Rashmi aich and David Evans

(source: Reuters)