Chicago | Reuters — U.S. grain futures fell as much as two per cent on Tuesday, with corn and wheat hitting roughly three-month lows, as favourable crop conditions and signs of easing tensions in major export hub Ukraine sparked investor long liquidation, traders said.
Bull spreading in Chicago Board of Trade corn and soybean futures saw new-crop contracts posting larger declines than nearby contracts, reflecting forecasts for mostly dry conditions for planting in the U.S. Corn Belt.
Analysts on average expected the U.S. Agriculture Department’s report late on Tuesday to say farmers caught up on corn and soybean sowings after a slow start to the spring planting season.
“We’re definitely taking the concern off this market about planting progress, especially given the forecast. We have a very good forecast for very good potential yields this year,” said Rich Nelson, an analyst at Allendale Inc.
Most-active July corn futures fell 8-1/4 cents to $4.69-3/4 per bushel, the lowest level since March 4 (all figures US$). New-crop December corn shed 9-1/2 cents to $4.65-3/4, the lowest since Feb. 28.
Soybeans for July delivery declined 28 cents to $14.88-3/4, while November beans were down 27 cents at $12.37-1/2.
Chatter of new credit issues for soy importers in top buyer China and slowing U.S. exports also weighed on soybeans, the traders said. Defaults by Chinese soy importers resulted in a steep sell-off earlier this year.
USDA showed export inspections of soybeans and wheat near the low end of analyst estimates while inspections of corn were beat expectations.
“There are rumours going in Latin America of some (soy) cargoes that are in trouble again from letters of credit situations,” said AgResource Co president Dan Basse. “We are hearing two cargoes in Rio Grande that have been canceled, and some other problems due to financing due to structured commodity deals.”
Wheat extends losses
Wheat futures fell for the fifth straight session and for the 13th time in the past 14 trading sessions as substantial rainfall in parched areas of the U.S. Plains reinforced the outlook for a large global crop. Tuesday was the first trading session this week for U.S. futures after the U.S. Memorial Day holiday on Monday.
CBOT July wheat finished 1.8 per cent, or 11-1/2 cents, lower at $6.51 per bushel.
Grain prices overall were also undermined by relief that there was a decisive outcome in Sunday’s presidential election in Ukraine, a major grain exporter, despite fighting in pro-Russian strongholds in the east of the country.
The recent slide in international wheat prices has been reflected in selling by investment funds. Noncommercial traders, a category that includes hedge funds, switched to a net short position in CBOT wheat in the week to May 20, regulatory data released on Friday showed.
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen and Christine Stebbins in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.