U.S. grains: Soy, wheat fall on broad commodity weakness

(Stephen Ausmus photo courtesy ARS/USDA)

Chicago | Reuters — U.S. soybean futures fell on Monday on profit-taking as commodities fell broadly and soymeal backed down from contract highs, analysts said.

Wheat also declined but corn futures rose, bucking the weak trend.

At the Chicago Board of Trade, July soybeans settled down 15-3/4 cents at $10.58-1/2 per bushel after dipping to $10.52 (all figures US$).

CBOT July wheat ended down 5-3/4 cents at $4.62 a bushel and July corn rose 3-1/4 cents at $3.97-3/4 a bushel.

Soybeans sagged as the sizzling soymeal market cooled. The spot July soymeal contract retreated after posting a contract high of $398.30 per short ton, the highest spot soymeal price since December 2014.

Soymeal futures have advanced in recent weeks on worries about the size and quality of Argentina’s soybean harvest following April floods. Argentina is the world’s top exporter of soymeal, a livestock feed ingredient produced along with soyoil when soybeans are crushed.

But analysts said the soymeal market’s latest leg up was harder to explain in fundamental terms, given that U.S. cash values have been relatively flat.

“I get a lot of people saying, ‘Isn’t this because of Argentina?’ Well, your cash markets are not showing it. This would suggest somebody overstayed their welcome with their short positions,” said Tom Fritz with EFG Group in Chicago.

Commodities fell broadly, despite a downturn in the U.S. dollar index. The 19-market Thomson Reuters CoreCommodity CRB Index slipped 0.5 per cent.

“Sentiment remains generally bearish toward the broader commodity sector on economic concerns to start the week,” INTL FCStone chief commodities economist Arlan Suderman said in a note.

Wheat followed the weak trend and faced fundamental pressure as the U.S. winter wheat harvest approaches at a time of plentiful world inventories.

Corn rose, gaining against soybeans on inter-market spreads on ideas that U.S. farmers might plant less corn and more soybeans than the U.S. Department of Agriculture projected in March. USDA will release revised acreage estimates on June 30.

“Clear weather and the prospect of additional bean acres weighs on November beans, which in turn gives corn a little bit of indirect support,” said Fritz.

In its weekly crop progress report, the USDA said the U.S. corn crop was 86 per cent planted as of Sunday, ahead of the five-year average of 85 per cent but behind an average of analyst expectations for 88 percent.

USDA reported soybean planting progress at 56 per cent, ahead of the five-year average of 52 per cent and an average of trade estimates of 55 per cent.

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

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