Chicago | Reuters –– Chicago Board of Trade soybeans and wheat firmed slightly on Wednesday as bargain hunters stepped into the market to provide a boost to commodities that were trending near four-year lows, traders said.
Corn futures sagged as a likely record U.S. harvest in the coming weeks will flood the countryside with supplies. The harvest expectations also capped the gains in soybeans.
“The new crop is going to overwhelm the balance tables,” Matt Zeller, director of market information at INTL FCStone, said in a note to clients.
Supplies were tight in the country but processors and elevators were preparing to be overwhelmed with a glut of both corn and soybeans after fields dry out.
The latest forecasts call for some more rain across key growing areas in the next few days before dry conditions allow farmers to aggressively cut their crops. There was little threat of frost damage through the first week of October.
Chicago Board of Trade corn for December delivery ended down two cents at $3.41-1/2 a bushel (all figures US$). CBOT November soybeans were 1-3/4 cents higher at $9.82-1/2 a bushel.
CBOT soft red winter wheat also closed higher, although light demand for U.S. supplies on the export market kept the gains in check.
The benchmark CBOT December soft red winter wheat contract gained three cents at $4.99-1/4 a bushel. K.C. hard red winter wheat for December delivery shed one cent to $5.82-1/4 and MGEX December spring wheat fell 2-1/2 cents to $5.63 a bushel.
Egypt, the world’s largest buyer of wheat, bypassed U.S. supplies in its latest tender. Traders said that the U.S. wheat offered was 50 cents a bushel more expensive than the winning French cargoes.
A bearish tone was expected to hang over prices due to plentiful global supplies.
“We believe that a bumper global harvest, weaker demand from key importers and competitively priced Black Sea wheat will undermine the market in 2014-15,” Abah Ofon of Standard Chartered Bank said in a note.
Uncertainty about Chinese demand for both corn and soybeans added further pressure to prices on Wednesday.
Officials from the USDA and China’s quality watchdog failed in talks last week to settle a dispute over testing for genetically modified content in corn byproduct distiller’s dried grains (DDGs), two industry sources said.
Additionally, Chinese imports of U.S. soybeans could plunge by as much as a quarter in the crop year that began this month after processing margins in the country fell to their lowest level in two years, industry sources said.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.