Chicago | Reuters — U.S. corn tumbled the most since June and soybean futures extended declines to a one-month low on Tuesday as plentiful global stockpiles triggered massive liquidation of long positions by investment funds, traders and analysts said.
Chicago Board of Trade March corn fell more than four per cent as commodity funds sold the largest volume of contracts in 1-1/2 years.
Crude oil pared losses from a six-year low to turn higher, causing some traders to move money from agriculture commodities into energies, according to Joe Davis, analyst at Futures International in Chicago.
“Look for this type of flow to continue as crude starts to capitulate at the bottom,” Davis said. “Sell upticks in corn and soybeans over the next week.”
CBOT March corn ended 16-1/2 cents lower at $3.85-3/4 per bushel, the lowest level since Dec. 3 (all figures US$). Soybeans for March delivery were 12 cents lower at $10.04 while the expiring January soy contract briefly fell below the psychological threshold of $10, hitting a low of $9.98.
The losses were a day after the U.S. Department of Agriculture predicted record-large global soy supplies and the largest domestic corn supply in history.
“The (USDA) bean report was flatout bearish. That’s a tough one to overcome,” said EFG Group analyst Tom Fritz.
Both soybean and corn futures had “outside days” on the charts on Monday — soybeans lower and corn higher — in technical indicators that typically hint at price direction. However, corn failed to reach a new high despite the bullish chart formation, sparking a selloff.
“We had the technical impetus to move higher but we’re negating the outside up day,” said Top Third Ag Marketing analyst Mark Gold.
Analysts said further declines were likely as the market prepares for bumper South American harvests before the planting season in the United States that begins as early as February.
Wheat futures reversed from earlier narrow gains to turn lower on pressure from the sharp downturn in the corn pit. CBOT wheat for March delivery shed 1.3 per cent, or 7-1/2 cents, to $5.48 per bushel, a seven-week low.
— Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.