U.S. grains: Soybeans drop; corn firms on technical buying

(Lisa Guenther photo)

Chicago | Reuters — U.S. soybean futures fell on Friday, capping their fourth straight losing week on profit taking and concerns about slowing demand from China, the world’s top buyer of the oilseed, traders said.

Wheat also fell, weighed down by technical selling and seasonal harvest pressure, while corn rose to a 10-day high.

Soybeans finished well off their daily lows, but unwinding of bull spreads kept old-crop contracts in negative territory. The four straight weeks of losses was the longest for the commodity since an equal streak that ended in early August 2013.

“Beans are having trouble finishing the week on a positive note,” INTL FCStone said in a note to clients. “The whole complex is down as China appears to be slowing on demand for feeding animals.”

CBOT July soybeans settled five cents at $14.15-3/4 a bushel (all figures US$). Prices faced resistance at the 100-day moving average, closing below that key technical point despite a round of late buying.

New-crop soybean contracts closed firm on the unwinding of bull spreads as well as signs of overseas demand. The U.S. Agriculture Department on Friday morning said exporters sold 110,000 tonnes of U.S. soybeans to unknown destinations for delivery in the 2014-15 crop year.

CBOT July corn was up 2-3/4 cents at $4.53-1/4 a bushel, with traders citing $4.50 as a key support point. CBOT July soft red winter wheat was 8-1/4 cents lower at $5.85-1/4 a bushel.

For the week, front-month soybeans were down 0.7 per cent, front-month corn was up 1.4 per cent and front-month wheat was down 0.1 per cent.

The weekly gains in corn snapped a five-week string of declines for the yellow grain. Wheat has fallen for six straight weeks, shedding 18 per cent during that time.

Concerns about recent rains in the U.S. Midwest and Plains hurting the quality of the mature wheat crop limited declines in wheat despite expectations of ample supplies following harvest.

“Precipitation is hurting the quality outlook for the already reduced supply of hard red winter wheat in the U.S. — the U.S. is already priced out of the international market so this doesn’t necessarily warrant higher prices,” Macquarie analyst Chris Gadd said.

“Our outlook remains bearish, the reality is the world looks well supplied.”

The gains in corn were kept in check by expectations of good crop weather during the next few weeks. No signs of damaging heat were in the forecast for the U.S. Midwest. The crop will start its key pollination phase of development in many areas in the next few weeks and high heat during that period can rob corn of its yield potential.

— Mark Weinraub is a Reuters correspondent reporting on grain markets from Chicago. Additional reporting for Reuters by Sarah McFarlane in London and Naveen Thukral in Singapore.

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