U.S. corn futures fell 1.8 per cent to a one-week low on Thursday, pressured by worries of weakening demand for U.S. supplies from China, traders said.
Wheat and soybean futures also fell, with wheat hitting a 19-1/2 month low due to ample global stocks that weighed on the export prospects for U.S. supplies. Soybeans dropped on improving forecasts for crop development in Argentina.
“The new lows in beans are probably hitting as a consequence of the midday models continuing to show pretty good rains for South America,” said Mike Zuzolo, president of Global Commodity Analytics. “It has always favoured Brazil; the big question has been Argentina. It does look like about 70 to 75 per cent of the bean belt in Argentina and about 60 per cent of the corn belt is going to get hit.”
Traders said that outlooks for a cold snap across the U.S. Midwest and Plains were not causing worries about wheat development.
“There are uncovered areas in the Central Plains, but temps will not be cold enough to raise concerns over winterkill,” Terry Reilly, senior commodity analyst at Futures International, said in a note to clients.
Chicago Board of Trade corn for March delivery settled down 8-1/4 cents at $4.26-1/4 a bushel (all figures US$). Prices hit a low of $4.26, their lowest since falling to $4.24-1/4 on Dec. 19.
The March contract fell through key support levels at its 20-day, 30-day and 40-day moving averages on Thursday.
China has turned away about 2,000 tonnes of U.S. dried distillers grains (DDGs), a corn byproduct, and more rejections are expected in coming weeks as Beijing imposes strict checks over an unapproved genetically modified (GMO) strain. The move follows the rejection of more than half a million tonnes of U.S. corn
Corn notched its worst session in percentage terms since Dec. 13. The front-month contract had been on a four session winning streak, its longest since July.
CBOT March wheat was off 1/4 cent at $6.06 a bushel, above its session low of $6.00-3/4. On a continuous basis, the front-month contract’s low was its lowest since hitting $5.97-1/2 on May 15, 2012.
CBOT March wheat, KCBT March hard red winter wheat and MGEX March spring wheat all set contract lows.
Some areas of central Illinois and Indiana, where snow cover is lacking, may see some damage to dormant soft red winter wheat during a cold snap early next week. But overall, temperatures are not expected to drop enough to cause winterkill in major wheat producing areas such as Kansas.
“If it drops a few more degrees than what we are forecasting right now, then there might be a little winterkill,” said Don Keeney, a meteorologist with MDA Weather Services. “If it gets to -4 F or below, it will be an issue,” he said.
CBOT January soybeans ended 15 cents lower at $13.18-3/4 a bushel, closing below their 30-day moving average for the first time since Nov. 20. Soybeans briefly traded higher early in Thursday’s session but technical selling hit the market after it breached its 20-day moving average.
— Mark Weinraub is a Reuters correspondent covering grain futures markets from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago.