U.S. grains: Bearish supply outlooks spark selling in corn, soy, wheat

Wheat outlooks in Canada, Russia, Australia bearish

CBOT November 2020 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. soybean futures fell for the fourth day in a row to their lowest since June 30 as expectations kept building that growing supplies will outstrip demand even as top buyer China steps up its purchases, traders said.

A bearish supply outlook also pressured wheat futures, which dropped to a one-month low, and the corn market.

Chicago Board of Trade November soybean futures dropped 8-3/4 cents to $8.67-1/2 a bushel (all figures US$).

USDA on Friday reported private sales of U.S. soybeans to China of 456,000 tonnes, the biggest single-day soy sale to the world’s top buyer since June 11.

Traders were staking out positions ahead of the U.S. Agriculture Department’s monthly supply and demand report next week that analysts are expecting will boost the government’s view of the supply situation for all three commodities.

“We have good growing conditions,” said Brian Hoops, president of broker Midwest Market Solutions. “We have a report that is next week that is expected to be a little bit bearish. Political tensions continue to rise. All those factors are bearish enough to continue to push this market lower.”

CBOT September soft red winter wheat ended 8-3/4 cents lower at $4.92-1/2 a bushel. The contract dropped 6.6 per cent this week, the biggest weekly loss for the most-active futures contract since early 2019.

An estimate calling for a record Canadian wheat crop, rising forecasts for Russia’s harvest, improving conditions in Australia and good early signs for the U.S. spring wheat harvest were underscoring ample global supplies.

“Wheat slipped again under the rallying cry ‘world crops are getting bigger’,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital said in a research note.

CBOT December corn futures ended three cents lower at $3.20-3/4 a bushel.

— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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