U.S. grains: Soybeans hit one-month low on technicals, rising world supply

(Lisa Guenther photo)

Chicago | Reuters — U.S. soybean futures dropped to a one-month low on Friday on technical selling and pressure from rising global supplies as South American growers are expected to harvest bumper crops in the coming weeks.

Technical selling also dragged corn and wheat prices to their lowest in three weeks, while a firmer U.S. dollar weighed down grain prices in general.

“We had a poor technical close on Wednesday, especially in the beans, and this weakness is a follow-through from that,” said Jack Scoville, vice-president at Price Futures Group.

“And with the turn of the calendar, the attitude of the market is shifting away from the U.S. and down to South America and there doesn’t seem to be an issue down there that is really bullish right now.”

Chicago Board of Trade March soybeans fell 16 cents, or 1.6 per cent, to $10.07-1/2 a bushel, slipping below its 100-day moving average of $10.15 earlier in the day (all figures US$). The contract’s 4.4 per cent weekly drop was its steepest in 3-1/2 months.

CBOT March corn breached its 50-day moving average of $3.93 during the session but closed above that level at $3.95-3/4 per bushel for a 1-1/4 cent, or 0.3 per cent, daily decline. It closed the holiday-abbreviated week down 4.6 per cent, the largest weekly drop for a spot corn contract since July.

CBOT March wheat dropped 8-1/2 cents, or 1.4 per cent, to $5.81-1/4 per bushel. Its 4.8 per cent weekly decline was its biggest drop in 3-1/2 months.

Commodity funds were net sellers of an estimated 5,000 soybean and 3,000 wheat contracts on the day, but were even in corn, trade sources said.

Stronger-than-expected corn export sales last week and a large daily sales announcement on Friday limited declines in corn.

The U.S. Department of Agriculture said U.S. exporters sold 895,100 tonnes of corn in the week ended Dec. 25, above trade forecasts for 600,000 to 800,000 tonnes. USDA also reported private sales of 210,000 tonnes of new-crop corn to Japan.

Soybean and wheat export sales fell within the range of trade forecasts.

Easing concerns about damage from frigid weather to the dormant U.S. Plains hard red winter wheat crop weighed on wheat prices. But traders will be monitoring temperatures in eastern Midwest soft red winter wheat areas next week as forecasters expect temperatures to plunge to potentially crop-damaging levels.

— Karl Plume reports on ag commodity markets for Reuters from Chicago.

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