U.S. corn futures hit a fresh three-year low on Monday, their fourth straight day of declines, as expectations for a record crop in the United States continued to build, traders said.
Wheat also dropped, under pressure from technical selling as well as spillover weakness from corn. Soybeans were mixed, with the nearby contract dropping on heavy deliveries while deferred months firmed on short-covering and bargain buying.
Traders were squaring up positions ahead of the U.S. Department of Agriculture’s much anticipated monthly supply and demand report on Friday. The October report was scuttled due to the partial shutdown of the federal government.
Soybeans bucked the overall bearish tone hanging over the grains market, bouncing back after falling 2.6 per cent last week.
“We had a really good sell-off here and… we are heading into a big USDA report,” said Chris Robinson, senior trader and analyst at Top Third Ag Marketing. “The biggest thing is that anybody who was short is taking profits.”
Chicago Board of Trade January soybean futures, the most actively traded contract, settled up five cents at $12.56-1/2 a bushel. The November soybean contract, which is in the delivery period, was two cents lower at $12.64 a bushel (all figures US$).
Front-month soybeans bottomed out at $12.60, the lowest since Feb. 24, 2012.
Analysts said soybeans were drawing additional support from improved crushing margins, with Chinese interest underpinning gains.
CBOT December corn was one cent lower at $4.26-1/4 a bushel and CBOT December wheat was down five cents at $6.62-3/4 a bushel. The front-month CBOT wheat contract hit its lowest since Sept. 25.
Analysts are expecting the USDA report to peg the U.S. corn crop at 14.003 billion bushels, based on an average yield of 158.933 bushels per acre, according to the average of 27 estimates in a Reuters poll. In September, USDA forecast a corn crop of 13.843 billion bushels and an average yield of 155.3 bushels per acre.
Soybean production was seen at 3.221 billion bushels, up from the September estimate of 3.149 billion.
“Everyone is expecting the USDA on Friday to increase its forecast for the soybeans and the corn harvests,” said Michaela Kuhl, a grains analyst with Commerzbank.
“All the estimates have come in quite high so everyone is expecting very good numbers. Unless there are any news to the contrary, it will be very difficult for corn prices to increase over the next few days.”
U.S. farmers are making rapid progress harvesting corn and soybeans despite a late start due to immature crops and despite occasional rains that caused temporary slowdowns, analysts said Monday.
The corn harvest was likely 71 per cent complete as of Sunday and soybean harvest was 87 per cent complete, according to an average of 10 estimates in a Reuters poll. The early November average from 2008 to 2012 was 71 per cent for corn and 86 per cent for soybeans. USDA will provide its latest update on crop progress on Monday afternoon.
Farmers should make quick work of their remaining acres after a brief slowdown during the next few days.
“Showers will develop in the west tomorrow and then the east Wednesday, followed by nearly a week of dry weather,” Commodity Weather Group said in a note to clients. “This should allow much of the soybean harvest to be completed and push the corn harvest along as well.”
— Mark Weinraub is a Reuters correspondent covering grain futures markets in Chicago. Additional reporting for Reuters by Sam Nelson in Chicago and Agnieszka Flak in Milan.