U.S. corn futures drifted lower and soybeans closed mixed on Wednesday amid light profit-taking and technical selling, with prices anchored by ample supplies from a massive U.S. harvest.
The announcement of a large soft red winter wheat sale to Egypt briefly lifted wheat futures, but prices later retreated on a lack of follow-though buying and spillover pressure from lower corn.
Corn fell for the sixth time in seven sessions, while wheat and soy dropped for the fourth time in five days.
Cautious trading ahead of Friday’s expiration of December options kept a lid on trading volume in corn and wheat.
“We’re just seeing a general lack of direction in grains. We’ve got a little bit of technical weakness that we’ve got to absorb, but losses are modest,” said Shawn McCambridge, analyst at Jefferies Bache.
“The sellers are trying to test the downside of this market and we could get a little bit of a bounce by the end of the week if we can’t go through the recent lows.”
Chicago Board of Trade December corn settled 3/4 cent lower at $4.17 a bushel after hitting a three-year spot-contract low of $4.10-3/4 a day earlier (all figures US$).
CBOT January soybeans shed 2-1/2 cents to $12.73-3/4 a bushel and CBOT December wheat lost 3 cents to $6.47-1/4 a bushel.
Commodity funds sold an estimated net 3,000 corn contracts on the day and a net 2,000 contracts each of soybeans and wheat, trade sources said.
Wheat hit a 1-1/2 week high early in the session after the U.S. Department of Agriculture announced the sale of 110,000 tonnes of soft red winter wheat to Egypt, but the market failed to hold the gains. Egyptian government wheat buyer GASC booked a similar volume of Russian wheat a day earlier via a tender in which no SRW wheat offers were made.
The Rosario Grains Exchange forecast Argentina’s wheat crop at 9.1 million tonnes in its first estimate of the season, well below USDA’s 11-million-tonne view. The low forecast, which suggested limited Argentine exports for a second straight year, failed to lift futures despite the potential for increased U.S. wheat demand.
Farmers are in the final stages of harvesting a record-large U.S. corn crop and the third-largest U.S. soybean crop on record.
“I think market attention is coming back to the large crops being gathered in the U.S. and elsewhere and this is weakening prices today, especially corn,” Commerzbank analyst Carsten Fritsch said.
“Big supplies are facing the global market, as the record U.S. crop reaches its final stages.”
U.S. corn prices hovered near three-year lows but still faced stiff competition in the global market from Black Sea grain.
Meanwhile, global demand for U.S. soybeans has slowed as favourable crop weather in South America eased concerns about recently planted crops that will be harvested early next year.
— Karl Plume reports for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Michael Hogan in Hamburg.