U.S. soybeans drop on profit-taking, technical selling

Nearby U.S. soybean futures fell on Friday for the first time in seven sessions and spot corn futures eased after two days of gains as investors squared positions ahead of the three-day U.S. Memorial Day holiday weekend.

Deferred contracts of both commodities posted modest gains in thin trading volume.

Wheat prices declined on profit-taking following a two per cent surge a day earlier and on forecasts for rain in the southern Plains wheat belt this weekend that could boost yields slightly in the nearly mature crop.

Volatile price moves on Thursday left some traders weary so trading volume was light. Chicago Board of Trade futures markets will be closed on Monday.

“We have a three-day weekend in front of us and there’s a bit of fatigue after Thursday’s price action, the big rejection of prices on soybeans. That might have shocked a few traders and moved them to the sidelines today,” said Rich Nelson, chief strategist with Allendale Inc.

He was referring to an uncommonly wide trading range of nearly US60 cents a day earlier and a steep late-session spike followed by a rapid retreat. The whipsaw price moves also spilled over to corn and wheat.

CBOT July soybeans fell 23-1/4 cents, or 1.6 per cent, to $14.76-1/4 per bushel (all figures US$). The contract encountered chart resistance near $15 and selling pressure intensified as prices fell below Thursday’s low of $14.87-1/2 and below chart support around $14.80.

“There are a lot of ideas that we peaked out yesterday and we’re seeing some follow-through selling here today. It doesn’t help that basis levels have backed off. Apparently a lot of cash beans moved on Thursday’s rally,” said Jack Scoville, vice-president for Price Futures Group.

“It’s a thin trade today so it doesn’t take a whole lot to move the market,” he added.

Persistent rumours that top soybean importer China was cancelling some of its Brazilian soybean purchases and that U.S. livestock and poultry producers were importing more South American cargoes added to the bearish tone, traders said.

Still, soybeans posted a fourth straight weekly advance, adding 1.9 per cent in the week.

Old-crop corn prices slid lower on light profit taking. Deferred contracts edged higher in light trade, with gains capped by forecasts for scattered rain around the U.S. Midwest that were expected to boost the recently planted crop.

More than 70 per cent of the crop was seeded as of last week and some analysts believe planting could reach 80 to 85 per cent by this weekend.

CBOT July corn dipped 4-3/4 cents, or 0.7 per cent, to $6.57-1/4 a bushel but ended the week higher for a second consecutive week, adding 0.7 per cent.

Trading was thin ahead of the three-day holiday weekend, with corn volume totalling little more than half of its 250-day moving average.

Wheat retreated from Thursday’s one-week high, although declines were limited by a sign wheat export demand may be picking up.

The U.S. Agriculture Department on Friday confirmed private sales of 180,000 tonnes of new-crop soft red winter wheat to China.

CBOT July wheat shed 5-3/4 cents, or 0.8 per cent, to $6.97-1/2 a bushel but closed with a 2.1 percent weekly gain, its first in three weeks.

Commodity funds were net sellers of an estimated 2,000 wheat contracts on the day, as well as 3,000 corn contracts and 7,000 soybean contracts, trade sources said.

— Karl Plume reports for Reuters from Chicago.

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