U.S. grains: Markets sink from highest levels in at least six weeks

(Lisa Guenther photo)

Chicago | Reuters — U.S. grain and soybean futures tumbled Friday as traders booked profits after prices climbed to their highest level in at least six weeks.

Soybeans retreated from a session high above US$10 a bushel amid expectations that rains next week will improve planting conditions in Brazil, the world’s top exporter of the oilseed.

In the U.S., dry weather is allowing farmers to make rapid progress harvesting corn and soybeans following rain delays.

“We are starting to see some profit taking after this week’s gains, which is not surprising,” said Karl Setzer, market analyst for MaxYield Cooperative.

Chicago Board of Trade front-month November soybeans fell 1.5 per cent to $9.77-1/2 a bushel after climbing as high as $10.02, the highest price for a nearby contract since Sept. 12 (all figures US$).

The soy market has rallied seven per cent this month on concerns about dryness in Brazil, tight old-crop supplies in the U.S., and strong demand from top-buyer China.

“I can’t argue with most of this rally,” said Rich Nelson, chief strategist at brokerage Allendale. Rains in Brazil will “definitely take some of the bite out of the market next week,” he added.

Soy prices could resume their rally next week as U.S. farmers are delaying sales of newly harvested crops due to low prices, analysts said.

Traders’ focus “has shifted from new-crop supply to restocking depleted old-crop U.S. soybean and meal pipelines,” said Rich Feltes, vice-president of research at RJ O’Brien.

“We’re in midst of a rally in a bear market fed in part by farmer refusal to restock pipeline,” he noted.

December corn slid 1.9 per cent to $3.53 a bushel after climbing as high as $3.65, the highest price for a front-month contract since Aug. 22.

December wheat sank 1.7 per cent to $5.17-3/4 after hitting a six-week high of $5.39-1/4 a bushel in earlier trade, the highest price for a nearby contract since Sept. 3.

Commodity funds sold a net 8,000 corn contracts, 7,000 soybean contracts and 4,000 wheat contracts, traders said.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral and Sybille de La Hamaide.

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