Rural commodities tumbled after USDA global supplies report. Better weather conditions in Brazil and US also sent farm commodities lower. From the demand side, high grain prices threaten to cap consumption.
Wheat was the top-loser as USDA upgraded US domestic production forecast, citing brighter production prospects in northern states. At the same time, global output is set to fall 4.7% as drought in Russia curbed crops.
Corn declined as demand concerns outweighed supply cuts. USDA stated that drought in the Midwest is expected to result in 17-year low crop yields. However, experts consider that recent jump in prices may pressurize demand.
Sugar lost 0.29% despite tightening global supplies. Indian output is likely to miss next year forecast as dry weather may curb yields in some areas. UK production also is expected to decline on lack of summer sun.
Coffee was flat after Colombia, world second largest Arabica coffee beans producer, reported that its coffee output soared by annualized 26% last month.