U.S. grains: Corn, soy sag on broad commodities weakness

Forecasts call for rain in northwestern U.S. Midwest

CBOT December 2021 corn (candlesticks) with 20-, 50- and 100-day moving averages (yellow, orange and dark green lines). (Barchart)

Chicago | Reuters — U.S. corn and soybean futures fell about 2.5 per cent on Thursday, following broad declines in commodities including crude oil and metals tied to fears about slowing global growth, analysts said.

Pressure also stemmed from forecasts for rains in northwestern portions of the Midwest that could improve production prospects, particularly for soybeans.

Wheat followed the weak trend in corn and soy, retreating after sharp gains last week that were linked to concerns over Northern Hemisphere harvest prospects.

A firmer dollar added to bearish sentiment, making U.S. grains less competitive globally. The greenback hit a nine-month high against a basket of other major currencies.

Chicago Board of Trade December corn settled down 14-1/4 cents at $5.50-3/4 per bushel (all figures US$). November soybeans ended down 33-1/4 cents at $13.20 a bushel, and December wheat fell 8-1/2 cents to settle at $7.42-3/4 a bushel.

“You can look at the outside markets as a trigger. You have the dollar into a contract high, and the crude oil down by $2. … You have got people getting away from long positions here, margin issues, and it (market weakness) feeds on itself,” said Terry Linn, analyst with Linn and Associates in Chicago.

Welcome showers were expected over the next few days in the Dakotas and Minnesota, areas that have struggled all summer with drought. The region’s corn crop is past its key growth phase, but soybeans are still developing and could benefit from moisture.

“These rains will be helpful,” Linn said, “but you’re not all of a sudden going to come up to a trend-line yield because of these.”

Traders continue to digest findings from this week’s Pro Farmer Midwest Crop Tour.

The tour late on Wednesday projected corn yields and soybean pod counts in Illinois above a three-year average. The tour is expected to release estimates for all of Iowa and Minnesota later on Thursday.

Improving export demand for U.S. soybeans underpinned futures. U.S. soybean export sales topped two million tonnes in the week ended Aug. 12, and the U.S. Department of Agriculture through its daily reporting system confirmed private sales of 263,000 tonnes of U.S. soybeans to China and 148,590 tonnes to Mexico, the latest in a string of deals.

— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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