U.S. grains: Corn, soy retreat on U.S. rains, broad declines in commodities

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Chicago | Reuters – U.S. corn and soybean futures declined on Monday, pressured by beneficial weekend rains in the Corn Belt and spillover weakness from outside commodity markets including crude oil and gold, analysts said.

Wheat followed the weaker trend, with a firmer dollar adding to bearish sentiment.

Chicago Board of Trade December corn settled down 2-3/4 cents at $5.53-3/4 per bushel and November soybeans ended down 7 cents at $13.29-3/4 a bushel. CBOT September wheat fell 7-3/4 cents to settle at $7.11-1/4 a bushel.

“Rain over the weekend in the central U.S. favored the central Plains and the northern and west-central Midwest. Recent rainfall has led to improvements in soil moisture … favoring corn and soybeans,” space technology company Maxar said in a daily weather note.

After the CBOT close, the U.S. Department of Agriculture rated 64 percent of the U.S. corn crop as good to excellent, up 2 percentage points from the previous week, while analysts surveyed by Reuters on average had expected no change. Soybean ratings held steady, as expected, with 60 percent of the oilseed crop as good to excellent.

Traders await the USDA’s monthly supply/demand reports on Thursday, in which the government is expected to lower its estimates of U.S. corn and soybean production and yield.

Declines in crude oil hung over corn, soybean and soyoil futures, reflecting those markets’ ties to biofuels.

“The moisture probably hit some of the dry areas … (and) the outside markets are under a lot of pressure. So it’s a one-two punch,” said Don Roose, president of Iowa-based U.S. Commodities.

Commodity funds hold net long positions in CBOT corn and soybean futures, leaving those markets vulnerable to bouts of long liquidation.

Uncertainty about export demand for U.S. grains added pressure, although the USDA confirmed private sales of 104,000 tonnes of U.S. new-crop soybeans to unknown destinations. The announcement followed sales last week of an additional 300,000 tonnes of soybeans to unknown destinations as well as 131,000 tonnes to China.

Still, sales of U.S. grains have slowed from a year ago. Beijing’s soybean imports fell in July from the same period in the previous year, customs data showed on Saturday, as poor crushing margins curbed demand.

“We know that China has been absent, for the most part, through the summer. So we are trying to find a level where we find some demand,” Roose said.

– Additional reporting by Gus Trompiz in Paris and Colin Packham in Canberra

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