Chicago | Reuters — U.S. soybean futures fell on Monday for the first time in six sessions and corn dropped after two sessions of gains on profit-taking and as traders took positions ahead of a government crop report due later this week.
Wheat futures closed lower as earlier technical buying and short-covering support faded amid weak U.S. export demand and improved crop weather in key production areas around the world.
A firm U.S. dollar and sharply lower crude oil, which hit a near seven-year low on Monday, weighed down grains markets in general.
Soybeans touched a six-week high in overnight trading before retreating below a key support level around $9 a bushel (all figures US$). Corn topped Friday’s one-month peak before turning lower.
“We rallied up last week on some moderately supportive news, and now we’re seeing a little profit-taking here ahead of Wednesday’s USDA report,” said Rich Nelson, chief strategist with Allendale Inc.
“We need some much stronger fundamental information to justify this (soybean) market holding over $9,” he said.
The U.S. Department of Agriculture will release its monthly supply and demand report on Wednesday. The agency is expected to cut its soy supply forecast and boost its corn and wheat supply outlook, a Reuters poll of analysts showed.
Chicago Board of Trade January soybeans fell 23-3/4 cents, or 2.6 per cent, to $8.82-1/4 a bushel, its steepest percentage drop since mid-August. Selling accelerated as the contract fell below its 100-day moving average around $9.00-1/4.
CBOT March corn shed 8-1/2 cents, or 2.2 per cent, to $3.73 a bushel, also the steepest drop since August.
Corn traders shrugged off a USDA confirmation on Monday of 115,000 tonnes in export sales to Mexico as sales overall remain well behind normal.
Soybean oil traders are monitoring proposed legislation in Congress to change the $1/gallon biodiesel blenders’ tax credit to a producer credit, which should boost biodiesel demand.
CBOT March wheat declined 1-3/4 cents, or 0.4 per cent, to $4.82-3/4 a bushel.
Large speculators held record net short positions in Chicago wheat futures and options last week, according to the latest data by the Commodity Futures Trading Commission.
But good crop weather in some key global production areas pressured the wheat market.
U.S. winter wheat conditions improved with beneficial rains as the crop moved into dormancy. Favourable weather in Ukraine has also boosted the country’s winter crops following a severe drought in summer and autumn.
— Karl Plume reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.