Corn prices fell for a ninth straight session on Wednesday as South American weather improved, but bargain buyers lifted wheat off a seven-month low and took soybeans from a one-month bottom.
Trade was choppy as weather conditions continued to boost prospects for U.S. wheat and South American corn and soybeans, pushing all three to recent lows early. Bargain buyers moved in, but a lack of follow-through purchases on corn left the market slightly weaker at the close.
Corn’s losing streak is the longest in 5-1/2 years.
The low prices also convinced funds to pause recent selling, said Arlan Suderman, senior market analyst for Water Street Advisory in Peoria, Illinois.
"We hit some intermediate levels of support, starting with wheat and corn, but really all the markets. I’m not convinced we’re at the bottom, but we were oversold," Suderman said.
"Considering how far we’ve fallen it’s not much of a bounce."
Chicago Board of Trade (CBOT) March corn touched a one-month low before ending down 3/4 cent at $6.95-1/2 a bushel (all figures US$).
Corn and soybean prices reached record highs in 2012 as drought ravaged U.S. growing areas. But prices fell back as U.S. crops turned out better than feared, and large Brazilian and Argentine harvests in early 2013 look set to replenish global supplies.
Early expectations are for robust U.S. spring planting of corn and soybeans.
"We have a long planting season and growing season ahead, and I think maybe (selling) is a little overdone," said Shawn McCambridge, analyst at Jefferies Bache in Chicago, but added that there appears to be little reason to encourage a bullish view.
Traders have noted growing dissatisfaction at still relatively high U.S. old crop corn prices, with South Korea’s largest feedmaker, NOFI, excluding U.S. grain from an international tender to purchase up to 195,000 tonnes of corn. U.S. corn was seen as not acceptable due to price and quality concerns.
"The crisis drought of 2012 now looks like it’s being followed by good South American crops and prospects of a normal U.S. harvest, and importers want to see prices marked down to reflect this," one European trader said.
March soybeans rose 2-1/4 cents, or 0.2 per cent, to $14.23/bu., after touching the lowest nearby price since Jan. 11.
Warm, dry conditions across Argentina are stressing soybean crops, however, rains are expected to return next week, said Don Keeney, a meteorologist at MDA Weather Services, in a note to clients.
Friday’s U.S. Department of Agriculture (USDA) report forecast better-than-expected global supplies of corn and soybeans in the coming months.
Chicago March wheat added 3-1/2 cents, or 0.5 per cent, to $7.35-1/2 a bushel. Wheat recovered after dipping earlier to $7.22-1/2, the lowest nearby price since last summer.
Crop-friendly rainfall and snow were moving across drought-stricken areas of the U.S. Plains hard red winter wheat region at mid-week, providing much-needed relief ahead of the growing season for the 2013 crop, an agricultural meteorologist said on Wednesday.
"Nebraska, Kansas and Colorado now have the chance for two shower events over the next two weeks that would offer some improvement in topsoil moisture," said Commodity Weather Group (CWG) meteorologist Joel Widenor.
Concerns about demand and improving U.S. weather have weakened wheat to the point where it may attract buying interest for export or use as domestic feed, McCambridge said.
"U.S. wheat should be competitive at these levels," he said.
Speculators in CBOT corn and soybeans held long positions as of the week to Feb. 5, while CBOT wheat speculators were net short.
The market will look to fresh planting estimates from the U.S. Department of Agriculture at its annual forum late next week. The acreage estimates could be even larger than USDA’s baseline projections released on Monday, observers say.
— Rod Nickel is a Reuters correspondent based in Winnipeg. Additional reporting for Reuters by Julie Ingwersen and Sam Nelson in Chicago, Michael Hogan in Hamburg and Mayank Bhardwaj in New Delhi.