U.S. grains: Rain in Brazil’s forecasts dampens soy futures

(Lisa Guenther photo)

Chicago | Reuters — U.S. soybean futures touched a one-week low on Thursday as expectations for beneficial rains in top exporter Brazil overshadowed stronger-than-expected U.S. export sales.

Concerns about large U.S. supplies and poor export demand pushed March corn to settle at a new contract low, while wheat futures reached a three-week low.

Traders kept their eyes on Brazil as forecasters said rain during the next two weeks could provide needed moisture for dry crop fields in the key state of Mato Grosso.

“As long as they keep that rain in the forecast in the first of the year, you’re going to have a hard time convincing anybody to go home long corn and soybeans,” said Jim Gerlach, president of A/C Trading in Indiana.

At the Chicago Board of Trade, March soybeans lost 7-3/4 cents to $8.73 a bushel (all figures US$). The market has pulled back since hitting a two-week high on Monday on worries that Brazil’s soybean harvest could be slightly smaller than earlier predictions.

Commodity funds sold an estimated net 5,000 soybean contracts, trade sources said.

“Bears are talking about the forecast in Brazil for early January turning a bit wetter and bringing some relief to areas that have been under stress,” said Kevin Van Trump, chief executive of Missouri-based consultancy Farm Direction.

Private exporters reported sales of 100,000 tonnes of U.S. soybeans for delivery to unknown destinations during the marketing year that begins on Sept. 1, 2016, the U.S. Department of Agriculture said.

Export sales of U.S. soybeans were strong last week at about 2.1 million tonnes, USDA said in a separate report. Analysts had expected sales of 900,000 to 1.1 million tonnes.

Weekly U.S. wheat export sales of 370,335 tonnes were the largest in three weeks and within analyst expectations that ranged from 250,000 to 450,000 tonnes, USDA data showed.

However, Egypt, the world’s top wheat importer, on Wednesday bought Argentine wheat in a tender, in a sign that policy measures by Argentina’s new government are spurring exports, traders said.

“Wheat traders are starting to see confirmation of more stiff competition,” Van Trump said.

CBOT March wheat slipped two cents to $4.67-1/2 a bushel, and March corn slipped one cent to $3.64-1/2 a bushel.

The grain and oilseed markets will be closed on Friday for Christmas.

Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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