Chicago | Reuters — U.S. grain futures on Thursday extended a setback from 10-week highs reached a session earlier, pressured by an influx of fresh supplies from U.S. harvests and profit taking ahead of the release of highly anticipated crop data.
Soybeans also fell, snapping a three-day rally before the U.S. Department of Agriculture issues monthly crop reports on Friday. Earlier in the week, prices rallied on expectations USDA will cut its corn and soybean production estimates.
Dry weather accelerating the autumn U.S. corn and soy harvests weighed on markets leading into the reports, said Don Roose, president of U.S. Commodities in Iowa. Conditions are expected to stay mostly dry in the Farm Belt during the weekend and next week.
“This harvest comes at you quick,” Roose said.
Chicago Board of Trade December corn lost 1.1 per cent, to $3.91-1/4 a bushel, after rising to $3.99-3/4 a bushel on Wednesday, the highest price for a front-month contract since July 24 (all figures US$). November soybeans dropped 1.1 per cent at $8.81-1/4, and December wheat slid one per cent at $5.11-1/2.
Some traders booked profits amid uncertainty about USDA’s upcoming projections. Commodity funds sold an estimated 8,000 contracts of soybeans, 6,000 corn contracts and 4,000 wheat contracts.
“For many traders, today is ‘get down’ day,” Chicago-based consultancy AgResource Co. said in a note. “Traders and producers that want to reduce their market risk must get their positions down to manageable levels.”
USDA’s October reports are considered particularly important because harvesting is actively underway, and production estimates incorporate data from test plots and farmers.
Analysts expect USDA to cut its projection for the country’s corn harvest to 13.504 billion bushels from its September estimate of 13.585 billion, according to a Reuters poll. The soybean crop is projected to decline to 3.908 billion bushels from 3.935 billion.
USDA also is expected to cut its estimates for U.S. ending stocks of corn, soybeans and wheat from last month.
“The USDA report will drive prices in the short term and thereafter the market is going to focus on what is coming from the field,” said Simon Clancy of IKON Commodities.
On Friday, traders will also wait for the results of a tender for wheat from top-importer Egypt.
Recently U.S. wheat has been too pricey to compete for sales to Egypt, which bought 235,000 tonnes of Russian and Ukraine wheat on Saturday.
— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago, Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.