U.S. grains: Corn to one-month low as rains spur long liquidation

Chicago | Reuters — U.S. corn futures fell on Wednesday, after plunging nearly 6 percent the previous day, as improving weather in the Midwest continued to stimulate long liquidation by commodity funds, traders said.

Soybeans bounced on talk of fresh export demand for U.S. supplies while wheat closed nearly unchanged, struggling to rebound a day after falling to a one-month low.

At the Chicago Board of Trade, the July corn contract settled down 3-1/4 cents at $3.93 per bushel after dipping to $3.92-1/4, its lowest level since May 23 (all figures US$).

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July soybeans settled up 4-1/4 cents at $11.37-1/2 a bushel and July wheat rose 1/4 cent at $4.58-3/4 a bushel.

Corn closed lower after a choppy session.

“It’s more liquidation. These funds are caught long and weather has improved, and we are taking risk premium out of the market. I think it’s as simple as that,” said Don Roose, president of Iowa-based U.S. Commodities.

Storms rolled through the Corn Belt on Tuesday and Wednesday, easing concerns about dryness in some areas. With the crop still heading into its crucial pollination phase, which typically occurs in July in the Midwest, weather remained the focus.

“What (rain) has fallen so far generally fell just north and east of the areas that are driest. That would be the southwestern half of Illinois, and south and west from there,” said Jim Gerlach, president of A/C Trading in Fowler, Indiana.

“People are catching their breath and checking rain gauges and seeing what fell where,” Gerlach said, noting that more storms were possible later on Wednesday.

Meanwhile, soybean futures rose as firming CIF (cost, insurance and freight) premiums for soybeans at the U.S. Gulf export terminal fueled talk of fresh business, in addition to soy sales confirmed Tuesday by the U.S. Department of Agriculture.

“There’s a rally in the CIF market, with the Chinese in the market again for beans. That’s supporting most of the contracts,” said Terry Reilly, analyst with Futures International in Chicago.

CBOT soft red winter wheat closed narrowly mixed while K.C. hard red winter wheat futures sagged, setting across-the-board contract lows on harvest pressure and plentiful world grain supplies.

The market drew underlying support from worries about the quality of wheat crops in Russia and Ukraine following recent rains.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hogan and Naveen Thukral.

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