Grain Futures Tick Lower

Grain prices were slipping Monday as forecasts of favorable weather improved the prospects for higher crop yields, leading to concerns that there would be bigger-than-expected supplies at harvest time.

July-dated corn futures were off 8 cents at $3.66 a bushel in recent action on the Chicago Board of Trade, while contracts for hard red winter wheat were lower by 10 cents at $4.91 a bushel in trading on the Kansas City Board of Trade.

The PowerShares DB Commodity Index Tracking Fund(DBC Quote), which follows agricultural products, as well as other commodities, was lower by 0.9%.

"We are getting the weather we need right now for improved crops of wheat," says Larry Glenn of Glenn Commodities in Wichita, Kan. He says conditions are expected to be warm, with modest moisture in Kansas, Texas and Oklahoma, the key growing areas for hard red winter wheat.

He also says drier weather in the corn-belt areas of Iowa, Illinois and Indiana will allow the sowing of corn seed. There is expected to be a dramatic increase in the acreage of corn planted this season, Glenn adds.

The firms that sell agricultural products were mixed, with Archer Daniels Midland(ADM Quote) barely changed, Bunge(BG Quote) slightly down and Corn Products International(CPO Quote) up 2.2%.

Elsewhere in the grain basket, Citigroup dinged shares of fertilizer-maker Agrium(AGU Quote) down to a hold rating from buy, sending the shares lower by almost 5% recently.

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