Corn drops to 12-week low

LONDON, May 27 (Bloomberg): Corn dropped to the lowest level since March on speculation US farmers accelerated planting last week while rain in the next few days improves prospects for developing crops. Wheat declined to an 11-week low.

About 73 per cent of corn in the main US growing areas was planted as of May 18, near the five-year average pace of 76 per cent and accelerating after cold weather delayed sowing earlier this year, US Department of Agriculture data show. The USDA is set to update its weekly crop progress report later today. About 30 per cent of the US Corn Belt will see favorable rains early this week, QT Weather said in a report.

"Planting might have been late two and three weeks ago, but it is almost certainly back to the five-year average now, and we'd not be surprised to see both corn and soybean planting ahead of schedule," economist Dennis Gartman said in his daily Gartman Letter. "Over the next few days we shall begin considering just how far down prices can fall."

Corn for July delivery fell 1.2 per cent to $4.725 a bushel at 7:05 am on the Chicago Board of Trade. Earlier, the price touched $4.70, the lowest for a most-active contract since March 4. Markets in the US were closed yesterday for the Memorial Day holiday. Soybeans for July delivery lost 1.1 per cent to $14.995 a bushel.

Wheat for July delivery fell 1.5 per cent to $6.4275 a bushel, after earlier touching $6.4125, the lowest for a most-active contract since March 11. Milling wheat for November delivery dropped 0.8 per cent to 191.25 euros ($260.83) a metric ton on Euronext in Paris.

Western Texas and Oklahoma as well as parts of Kansas and Colorado saw rain during the weekend, easing dry conditions for winter wheat crops, QT Weather said.