Reuters — U.S. soybean futures tumbled to a nearly one-month low on Tuesday, as rain in Argentina’s dry crop belts kept South America on track for a bumper harvest.
Chicago corn and wheat also ticked lower, under pressure from a stronger U.S. dollar and technical selling.
The most active soybean futures contract on the Chicago Board Of Trade lost 1.5 per cent, or 16-1/4 cents, at $10.05-1/4 a bushel (all figures US$).
Rain expected in Argentina this week has eased concerns about stress to corn and soybean crops in some areas, while forecasters continue to see record harvests in fellow exporter Brazil.
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Even so, dryness poses a threat to soy production in southern parts of Argentina’s breadbasket province Buenos Aires, climate experts said on Tuesday, and could interfere with planting.
Estimates of big South American output are more than offsetting strong export demand for U.S. soybeans, said Mike Zuzolo, president of Global Commodity Analytics in Atchison, Kansas.
The U.S. dollar, which rose on Tuesday to a 14-year high, has also taken the shine off healthy U.S. exports of soybeans and corn.
“The strong dollar indeed makes it hard for any rally potential to fully develop,” said Matt Ammermann, vice-president for Eastern Europe and the Black Sea region at INTL FCStone.
Corn futures shed 0.9 per cent, or three cents, at $3.50-1/4 a bushel, touching a more than two-week low.
The most active CBOT wheat futures contract edged 1-3/4 cents lower to $4.03-1/4 a bushel, with losses limited by cold U.S. weather. It touched its weakest price since Dec. 7.
Since the weekend, parts of the U.S. Plains and Midwest have experienced temperatures cold enough to threaten wheat crops.
“The market is a bit concerned about the cold weather but the reality is any losses in winter could be easily recouped with some good spring rains,” said Andrew Woodhouse, grains analyst at Advance Trading Australasia.
Wheat prices remain anchored by record global inventories projected in 2016-17, with U.S. wheat facing additional pressure from a dollar rally that makes the origin less competitive for export.
No U.S. wheat was offered in an import tender being held by Egypt on Tuesday, with the lowest bids coming in for Argentine wheat in a sign of the country’s renewed presence in export markets.
— Rod Nickel is a Reuters correspondent covering the agriculture and mining sectors from Winnipeg. Additional reporting for Reuters by Michael Hirtzer in Chicago, Colin Packham in Sydney and Gus Trompiz in Paris.
