Corn fell in Chicago, extending the biggest drop in seven weeks as a forecast for rain in parts of the U.S. eased concern that dry weather will cause yield losses in the world’s largest grower. December-delivery corn slid 0.8 percent to $3.9075 a bushel on the Chicago Board of Trade at 11:38 a.m. Paris time. The contract yesterday lost 3.3 percent, the most since May 28. Wheat also declined. “The driest corn and soybeans in central Illinois are experiencing substantial rainfall,” T-Storm Weather LLC in Chicago said in a report. Rains may also spread across drier areas of Indiana, Ohio and Michigan, it said. Prices were “weighed down by forecasts of rain for U.S. crops and expectations of excellent U.S. crop conditions,” Commonwealth Bank of Australia said in a report e-mailed today. Illinois is the second-largest U.S. soybean and corn producer, and with Indiana, Ohio and Michigan accounted for 30 percent of the nation’s last harvest of both crops, according to a January report from the U.S. Department of Agriculture. About 72 percent of the U.S. corn crop was in good to excellent conditions as of July 18, compared with 73 percent a week earlier and 71 percent a year ago, the USDA said yesterday. China, the second-largest corn consumer, sold 244,500 metric tons of the grain from state stockpiles in Inner Mongolia, 250,600 tons in Jilin province and another 98,100 tons in Liaoning province, the National Grain & Oil Trade Center said today. Wheat Declines September-delivery wheat dropped 0.7 percent to $5.78 a bushel. The grain’s 14-day relative strength index, a gauge of whether a commodity is overbought or oversold, has mostly been above 70 since July 7, a level some traders view as a signal that prices are poised to decline. “Steep losses in corn prices and a correction from a recent rally weighed on prices,” Commonwealth Bank said. Still, the bank said news remains mostly supportive of prices, including an expanding drought in Russia and Kazakhstan and exports from the U.S. Milling wheat for November delivery fell 0.9 percent to 166.50 euros ($215.63) a ton on NYSE Liffe in Paris. Ukraine will export 16 million tons of grain this year, less than a previous estimate of about 20 million tons, Agriculture Minister Mykola Prysyazhnyuk said. Russia, the world’s third-largest wheat grower in the 2009- 10 season, may reduce grain exports should crop losses caused by drought deepen, Arkady Zlochevsky, president of the national Grain Union, said yesterday. Wet Soil Rain in Canada last week added to excessive soil moisture in the nation’s main growing regions, the Canadian Wheat Board said. Canada was ranked the second-largest wheat exporter in the 2009-10 season by the USDA. The area in Canada seeded with wheat fell 7.1 percent to 22.7 million acres from a year earlier as wet weather kept farmers out of fields, Statistics Canada said in June. A survey due in August may show flooding caused further cuts, it said. Soybeans for November delivery gained 0.3 percent to $9.7475 a bushel in Chicago, erasing a drop of as much as 0.4 percent. To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

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