LONDON - Chicago corn futures fell to their lowest since June 3 on Tuesday as forecasts for rain boosted the U.S. production outlook following a spate of dry weather and the U.S. Department of Agriculture issued better than expected weekly crop ratings.
U.S. soybean futures were mostly lower with a slight decline in crop conditions largely anticipated while wheat prices were little changed.
"The prediction of rain has gone some way to allaying fears of an overly dry summer," Commerzbank said in a market note on Tuesday, also noting that contrary to expectations the USDA had not cut its crop ratings after a hot week.
The U.S. Department of Agriculture's weekly crop progress report rated 75 percent of the corn crop in good to excellent condition, unchanged from the previous week.
"We continue to see weather driving the market. It's been much hotter and drier in the U.S in the past few days and the outlook is maybe turning a little more favorable (for growing), and that's why we are seeing markets trading a little bit lower," said Graydon Chong, an analyst with Rabobank in Sydney.
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The most active corn futures on the Chicago Board of Trade were off 0.5 percent at $4.19 a bushel at 1115 GMT after earlier dipping to $4.18, the lowest since June 3.
CBOT soybean futures were mostly lower with most active November down 0.35 percent at $11.28-3/4 a bushel.
The USDA rated 73 percent of U.S. soybeans as good to excellent, down from 74 percent a week earlier and in line with trade expectations.
Wheat futures in Paris fell back slightly after rising on Monday although wet weather continued to curb the outlook for crops in the European Union.
"Much of Western Europe is very wet and is likely to remain that way until at least the end of the week," Commonwealth Bank analyst Tobin Gorey said.
September wheat futures in Paris were 0.15 percent lower at 164.00 euros a metric ton while CBOT July wheat rose a marginal 0.05 percent to $4.73-1/4 a bushel.
