U.S. grains: Soybeans slide, corn firms in pre-holiday consolidation


Chicago | Reuters — U.S. soybean futures eased on Friday as investors unwound spreads and squared positions ahead of the Memorial Day holiday weekend but the market still registered its strongest weekly advance in five weeks on worries about tight U.S. supplies.

Wheat fell for a fourth straight day to hit a 10-1/2-week low on weak demand and abundant global supplies. Corn firmed on bargain buying and as traders unwound long soybean and short corn spreads.

Trading volumes were light ahead of the long weekend, with Chicago Board of Trade futures markets closed on Monday for the U.S. holiday.

“We’re seeing some pretty quiet pre-holiday trade, which was expected,” said Frank Laplaca, vice president of commodities for Futures International in Chicago. “Traders are taking some money off the table going into the weekend.”

CBOT July soybeans fell 3-1/4 cents, or 0.2 per cent, to $15.15-1/2 per bushel after hitting a contract high of $15.36-3/4 the previous day (all figures US$). But the contract rose 3.4 per cent in the week, its strongest gain in five weeks.

Old-crop contracts remained underpinned by persistent demand and concerns about tight near-term U.S. supplies, which are projected to shrink to a decade low ahead of the next harvest.

The U.S. Department of Agriculture on Friday confirmed private sales of 330,000 tonnes of new-crop soybeans to China and unknown destinations.

July corn added 1-1/4 cents, or 0.3 per cent, to $4.78 a bushel, but declined 1.1 per cent from a week ago for its second straight weekly decline.

The new-crop corn and soybean ratio, which widened to a seasonal high of 2.68 to 1 this week, narrowed to 2.67 as traders unwound spreads.

The looming Northern Hemisphere harvest hung over the wheat market as U.S. grain has struggled to compete with less expensive origins in a recent string of international tenders.

“We’re going into harvest around the world and the competition is going to be keen. U.S. prices are just trying to get down to world levels,” said Don Roose, president of U.S. Commodities in West Des Moines, Iowa.

CBOT July wheat fell 6-3/4 cents to $6.52-1/2 a bushel, the lowest since March 1, down one per cent on the day and 3.2 per cent in the week. The contract has fallen 8.6 per cent over the past two weeks from one-year highs touched on fears of weather damage to U.S. wheat and disruption to Black Sea exports due to the crisis in Ukraine.

Traders were monitoring tensions in Ukraine ahead of Sunday’s presidential election after violence between pro-Russian separatists and Ukrainian servicemen erupted this week.

— Karl Plume reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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