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U.S. grains: Soy falls on position squaring

Chicago | Reuters — U.S. soybean futures fell on Wednesday in the second straight day of declines as investors evened out positions and locked in profits from monthly gains, traders said.

Wheat futures also fell, pressured by a firm dollar that further dimmed prospects for U.S. supplies on the export market. Corn was steady to slightly weaker, with bargain buying limiting declines but plentiful supplies following a record harvest continuing to weigh on the market.

Soybeans fell after trading higher during the overnight trading session as speculators unwound some bullish bets they made during the past few months.

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“Realistically, it is a little bit of month-end position squaring,” said Bill Gentry a broker at Risk Management Commodities. “The funds were pretty long the bean market and there is not much incentive to push them higher just yet.”

Chicago Board of Trade January soybean futures settled down 10-1/4 cents at $10.32-1/4 a bushel (all figures US$).

Traders shrugged off fresh signs that export demand for soybeans remained robust.

The U.S. Department of Agriculture on Wednesday morning said that private exporters reported the sale of 123,000 tonnes of soybeans for delivery to China during the 2016-17 marketing year. It was the first spot sale since Nov. 18.

The soybean market also ignored sharp gains in crude oil prices, which typically are supportive to soybeans.

Oil prices rose nearly nine per cent on Wednesday after Saudi Arabia’s oil minister said OPEC members meeting in Vienna were close to a deal on a production cut, with non-OPEC members also likely to reduce output.

CBOT March corn futures were down 1/2 cent at $3.48-1/2 a bushel while CBOT March soft red winter wheat was six cents lower at $4.02-3/4 a bushel.

Corn also saw support from a forecast from the U.S. Department of Agriculture (USDA) on Tuesday that U.S. farmers plan to cut their corn sowings and raise soybean plantings in the upcoming marketing year.

“The background fundamentals in both remain heavy, with both facing large supplies after big crops and only lacklustre demand,” Rabobank senior commodity analyst Graydon Chong said.

Egypt’s state grain buyer, the General Authority for Supply Commodities (GASC), bought 240,000 tonnes of Russian wheat in a tender on Tuesday. There were no U.S. supplies offered.

For the month, corn futures fell 1.8 per cent, wheat futures dropped 3.2 per cent and soybean futures rose two per cent.

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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