U.S. grains: Soy falls as export interest shifts

(Monsanto.com)

Chicago | Reuters –– Chicago Board of Trade soybean futures dropped to their lowest in nearly three months on Tuesday as export demand for U.S. supplies weakened ahead of what are expected to be record harvests in Brazil and Argentina, traders said.

Corn and wheat futures closed firm on a round of bargain buying following early losses. Corn hit a one-week high while wheat posted its first day of gains since Jan. 6.

The U.S. Agriculture Department said on Tuesday that exporters canceled the sale of 174,000 tonnes of soybeans that were to be shipped to China in the 2014-15 marketing year. USDA also reported the cancellation of deals for 285,000 tonnes of soybeans on Friday.

“We are starting to see a trend here of our biggest demand input beginning to shift their program to the Southern Hemisphere. And that’s a big deal,” said Terry Linn, analyst at the Linn Group, a brokerage in Chicago.

Overseas buyers were banking on bumper crops from South America to further bolster the global balance sheet and push prices lower.

“If the forecast holds for Brazil into early February it will be difficult to appreciably reduce their crop potential,” CHS Hedging market analyst Charles Soule said in a note to clients.

In Brazil, the main crop areas will see a cold weather front arrive by Thursday followed by rainfall, meteorologists said on Monday, suggesting relief for parched soybean crops as harvesting gets underway.

CBOT March soybean futures ended down 9-3/4 cents at $9.82 a bushel (all figures US$). Prices bottomed out at $9.72-1/4, the lowest since Oct. 27.

CBOT March corn was 3-1/4 cents higher at $3.90-1/4 a bushel, while March soft red winter wheat rose 4-1/4 cents, to $5.37 a bushel.

The gains pulled wheat from a 10-week low hit early in the trading session.

Concern about renewed hostilities in the Black Sea grains export region added support. Ukrainian army units came under attack from Russian regular forces in eastern Ukraine and heavy fighting was taking place, a Ukrainian military spokesman said.

Buying was limited in K.C. hard red winter wheat due to forecasts for some beneficial rain in key production areas of the U.S. Plains. K.C. March hard red winter wheat settled up just 3/4 cent at $5.77-3/4 a bushel.

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago, Naveen Thukral in Singapore and Gus Trompiz in Paris.

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