Chicago | Reuters — U.S. soybean futures fell to a one-month low on Wednesday as slowing export demand and big harvests in South America prompted a round of long liquidation, traders said.
Wheat futures also dropped, taking a breather after reaching the highest levels in more than a year, and corn was lower as well.
At the Chicago Board of Trade, benchmark July soybeans settled down 13-1/4 cents at $14.46-1/4 per bushel, after falling to $14.41-3/4, their lowest since April 3 (all figures US$).
July corn ended down 3-1/2 cents at $5.14, and July wheat ended down 1-1/4 cents at $7.37-3/4 a bushel.
Soybeans declined for a third straight session on rising global oilseed supplies and slowing demand from top importer China. China’s soy imports are expected to post a third monthly fall from the 4.62 million tonnes recorded in March, analysts said ahead of preliminary trade data due Thursday.
“You have lost old-crop demand; it’s pretty much gone. The overall mentality has to be lower on the beans,” said Mark Schultz, an analyst at Northstar Commodity in Minneapolis.
“If we start closing below $14.50, then we are probably headed lower. The technical picture starts to look tougher. On top of that, you have a massive long position in that market,” Schultz said.
Brazil should produce a record 89 million to 90 million tonnes of soybeans this year, Agriculture Minister Neri Geller said on Tuesday, above the 86.1 million tonnes forecast in April by ministry agency Conab. The agency is set to release an updated estimate on Thursday.
The spot May soybean contract, which expires next week, was pressured in early moves after the CBOT reported sizeable May deliveries totalling 176 contracts.
Corn pressured by active planting
Corn fell on profit-taking after surging 3.4 percent in the previous two sessions, and as farmers planted furiously in the U.S. Corn Belt ahead of rains expected later this week.
Fears about planting delays have underpinned the corn market since March in the wake of a brutal winter and a chilly spring, but planters have been rolling this week in core production states such as Iowa and Illinois.
“We’ve got aggressive planting going on. That’s the big issue,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. “A lot of areas in the central part of the Corn Belt will probably get wrapped up on some stuff before this rain event, particularly (Interstate) 80 and south,” Roose said.
USDA said farmers seeded 29 per cent of their intended corn acres by Sunday, lagging the five-year average of 42 per cent.
Corn prices were underpinned by new long positions in the market that some analysts attributed to the dire report on the impact of a changing climate that was released on Tuesday by the Obama administration.
“Yesterday, with the Obama administration talking about global warming and its effects on agricultural production down the road, I think we had some ETF buying in this market,” Roose said.
The CBOT said open interest in CBOT corn futures rose by 6,600 contracts, or about 0.5 per cent, on Tuesday to 1.35 million contracts.
Wheat rally pauses
CBOT July wheat fell back after rising in 10 of the last 11 sessions as scorching heat and dryness in the U.S. Plains and the turmoil in Ukraine threatened to reduce world supplies.
The market paused in advance of monthly supply/demand data due out from the USDA on Friday, Arnaud Saulais of Starsupply Commodity Brokers said. “It is common to see the markets pull back one or two days before the USDA reports, although wheat is still well supported by the hot weather in U.S. grain belts.”
USDA on Friday will release its first official production estimate for the U.S. wheat crop, along with initial forecasts for U.S. and world grain 2014-15 ending stocks.
“I do not think U.S. wheat is facing a resistance level; it is more of a general pause in the market,” Saulais said.
— Julie Ingwersen is a Reuters correspondent covering agricultural commodity markets from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.