U.S. corn futures fell about 2% on Monday, nearing a two-week low as Midwest weather forecasts turned milder for the crop's key growth phase this month, raising the potential for a large harvest, analysts said.
The rosy weather outlook also pushed soybean futures lower, and wheat followed the weak trend.
"Risk premium is coming out of the market due to improved weather conditions ... and we have huge (old-crop) supplies we are lugging around," said Don Roose, president of Iowa-based U.S. Commodities.
By 12:20 p.m. CDT (1720 GMT), most-active December corn futures on the Chicago Board of Trade were down 8-1/4 cents at $3.36-1/2 per bushel after dipping to $3.34-3/4, the contract's lowest since June 30. Benchmark CBOT November soybeans were down 18-3/4 cents at $8.72 a bushel.
Weather looked better for the balance of July, when crops are pollinating in the heart of the Midwest.
"The 15-day forecast has trended cooler and wetter across the central Midwest since Friday," space technology company Maxar said in a daily note.
'Good to Excellent'
Corn and soy futures had climbed earlier this month as hot, dry weather stressed crops in some areas.
Ahead of the U.S. Department of Agriculture's weekly crop progress report due later on Monday, analysts surveyed by Reuters on average expected the government to rate 70% of the U.S. corn and soybean crops as good to excellent, down 1 percentage point for each crop from the previous week.
Rising trade tensions with top global soy buyer China added to bearish sentiment, even after China booked 1.365 million tonnes of U.S. corn last week, its second-largest single-day U.S. corn purchase on record.
White House Economic Adviser Larry Kudlow said President Donald Trump is "not in a good mood" about China because of the coronavirus pandemic and other issues, but Kudlow said the United States is still engaged in the first phase of a massive trade deal with the Asian country.
CBOT September wheat was down 9-1/4 cents at $5.24-3/4 a bushel as traders continued to monitor Northern Hemisphere harvests.
Agriculture consultancy IKAR lowered its forecast for Russia's wheat crop to 76.5 million tonnes from 78 million previously.