Chicago | Reuters — U.S. corn futures dipped on Friday, hitting fresh contract lows after giving up early gains on technical selling, traders said.
Soybean futures also weakened slightly, pressured by forecasts for improving crop weather in South America. The outlook for rain added to the pressure on corn.
“Corn tried the upside early on short covering, but couldn’t hold the rally and fell back late in the session, with good weather in South America perhaps the catalyst,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a note to clients.
Wheat futures were flat, with ample supplies keeping a bearish tone firmly in place over the market despite signs of a pick-up in demand, traders said.
Chicago Board of Trade January soybean futures ended down 1/2 cent at $9.67-1/4 a bushel (all figures US$). CBOT March corn futures were off one cent at $3.47-1/2 a bushel.
“A significant change in the weather pattern across South America is expected to begin this weekend and continue at least through next week,” MDA Weather Services said in a note to clients. “Above-normal rainfall is expected across eastern Argentina and southern Brazil… which should lead to notable improvements in soil moisture.”
However, uncertainty about the effects of the dry start to the growing season were still hanging over the market even with the improved forecast.
The Buenos Aires Grains Exchange said drought could still lead to a cut in the estimated 2017-18 soybean planting area.
The dry conditions in Argentina helped to limit declines in corn, which has been struggling with large global supplies and strong Brazilian exports.
The U.S. Agriculture Department on Friday morning said that private exporters reported the sale of 257,000 tonnes of soybeans to China and 126,000 tonnes of soybeans to unknown destinations during the 2017-18 marketing year.
USDA also said that exporters booked sales of 134,503 tonnes of corn to Costa Rica.
CBOT March soft red winter wheat futures were unchanged at $4.18-1/4 a bushel.
USDA said on Friday morning that private exporters reported the sale of 130,000 tonnes of soft red winter wheat to unknown destinations for delivery during the 2017-18 marketing year.
That followed news earlier in the week that U.S. exporters booked a deal to sell 120,000 tonnes of hard red winter wheat to Algeria.
The deals tempered gloom about U.S. wheat exports in the face of stiff overseas competition and record global supplies.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago; additional reporting by Manolo Serapio Jr. in Manila and Gus Trompiz in Paris.