U.S. grains: Corn, wheat, soy drift lower in cautious trade

(Dave Bedard photo)

Chicago | Reuters –– U.S. corn futures fell for a third day on Thursday as the harvest of an expected bumper crop expanded, but price movement was restrained as markets digested a Federal Reserve decision to leave U.S. interest rates unchanged.

Wheat and soybean futures sagged on a lack of supportive fundamental news.

All three products pared losses after the Fed’s announcement and soybeans briefly turned higher, but corn and wheat then sank to session lows at the close.

At the Chicago Board of Trade, December corn settled down 6-1/4 cents at $3.79-3/4 per bushel (all figures US$). CBOT December wheat fell 6-3/4 cents at $4.81-1/2 a bushel and November soybeans ended down 2-3/4 cents at $8.84-1/2 a bushel.

Grains and oilseeds were little changed in early moves but declined after the U.S. Department of Agriculture’s weekly export sales report showed lacklustre demand, with sales of corn and wheat falling below the pace to meet USDA’s export forecasts for the 2015-16 marketing year.

“It appears that the relatively slow pace of U.S. export sales and supportive weather for the U.S. harvest expected over the next few weeks are weighing on grain futures prices,” wrote Helen Pound, a vice president with Wedbush Securities.

Also bearish, China’s imports of distillers dried grains (DDGs), a byproduct of corn-based ethanol, are likely to fall 13 per cent to 4.5 million tonnes in 2015-16, a senior broker with China-based COFCO Futures told a conference.

USDA reported weekly soybean export sales at 912,000 tonnes, at the low end of trade estimates but above the weekly pace needed to meet the government’s annual export forecast.

“The soybean sales, while they were not anything massive, it does show you that you are catching up to your export projection,” said Terry Linn of the Linn Group, a Chicago brokerage.

As well, USDA through its daily reporting system said private exporters sold 298,000 tonnes of U.S. soybeans to China for 2015-16 delivery, the second soy sale to China in as many days.

CBOT wheat followed the weak trend, anchored by heavy global supplies and good conditions for winter wheat as seeding expands in the southern U.S. Plains, a core crop area.

Statistics Canada said Canada’s wheat and canola crops look larger than they appeared earlier this summer, after the government agency factored satellite and other climate data into its estimates for the first time.

Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral and Gus Trompiz.

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