Chicago / Reuters – U.S. soymeal futures fell 4 per cent on Thursday for their biggest daily losses since June as investors locked in profits after prices for the protein-rich animal feed soared to a seven-week high.
Soybean futures shed more than 1 per cent, while corn edged lower following a spike in sales by U.S. farmers, who were harvesting record-large crops. A slow start to the autumn harvest and light farmer offerings had propped up grain prices to multiweek highs earlier in the session.
CME Group, owner of the Chicago Board of Trade, hiked margin requirements for soymeal futures late on Wednesday, making bets on the commodity more expensive.
“It’s just a little correction,” said Joe Davis, a vice president at brokerage Futures International.
“We heard that some of the (soymeal) cash levels were coming off in Argentina and Brazil. And the Merc with the margin raising by a third is helping to chase these guys out who were in it for spec reasons.”
CBOT December soymeal fell $17.20 to $380.00 per ton while soybeans for November delivery declined 18-3/4 cents to $10.24-1/4 per bushel.
Despite the losses in soymeal, futures on a continuous chart were on pace for a nearly 27 per cent gain in October, which would be their largest monthly gain since 2008 amid record export demand and railroad congestion that made it hard for processors to secure supply.
“Soymeal prices could remain very firm in the coming weeks, or at least until there are clear signs that crushing levels are picking up in the United States,” French consultancy ODA said in a note.
Corn for December delivery eased 1-1/4 cent to $3.74 and CBOT December wheat was down 2-1/4 cents at $5.36. Each contract reversed from earlier higher prices but remained on track for large weekly and monthly gains – corn was on pace for its best month since July of 2012.
“The recent fund buying we have seen was quieted today, and without this taking place, futures struggled,” MaxYield Cooperative analyst Karl Setzer said in a note. “Month end profit-taking, increased harvest pressure, and a lack of fresh news were also negative for today’s session.”
– Michael Hirtzer reports on ag commodity markets for Reuters from Chicago. Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.