Corn drops for 4th day as rains boost U.S. crop outlook

Chicago corn slid for a fourth session on Thursday with the market hitting its lowest in more than a month as widespread rains across the U.S. Midwest lifted crop prospects.

Soybeans edged lower after firming in the last session on the back of strong demand, while wheat ticked up on support from concerns over Black Sea crops.

Storms rolled through the U.S. corn belt on Tuesday and Wednesday, easing concerns about dryness in some areas. With the crop still heading into its crucial pollination phase, which typically occurs in July in the Midwest, weather remained the focus.

Thunderstorms were reported over parts of South Dakota, Missouri, Iowa and Illinois, bringing bursts of heavy rainfall totalling more than 2 inches per hour in spots.

That triggered liquidation of long positions by investors. Commodity funds were net sellers of Chicago Board of Trade corn contracts on Wednesday and net buyers of soybean futures.

"The rally in corn was driven mainly by fund buying and now the fall is also driven by funds," said Ole Houe, an analyst at brokerage IKON Commodities in Sydney. "With the current amount of corn available in the world the price should be around $3.50 a bushel. Corn in facing big competition from wheat."

Trade estimates of fund selling in corn ranged from 3,000 to 13,000 contracts, while estimates of net fund buying in soybeans ranged from 4,000 to 8,000 contracts.

Chicago Board of Trade most-active corn lost as much as 0.9 percent to $3.89-1/2 a bushel, the lowest since May 20. The market was trading down 0.5 percent at $3.91 a bushel by 0257 GMT.

Soybeans gave up 0.3 percent to $11.14 a bushel after climbing about half a percent on Wednesday.

The soybean market was underpinned by demand for U.S. supplies. Firming CIF (cost, insurance and freight) premiums for soybeans at the U.S. Gulf export terminal fueled talk of fresh business, in addition to sales confirmed by the U.S. Department of Agriculture.

Soybean spot basis bids were higher at U.S. Midwest river terminals on Wednesday, with the basis extending the previous session's steep gains on strong export demand and slow farmer sales.

Wheat added 0.2 percent to $4.59-3/4 a bushel, amid worries about the quality of wheat crops in Russia and Ukraine.

Rains have reduced protein levels in Russian wheat and raised concerns over fungal disease while also reducing the proportion of milling wheat in Ukraine.