U.S. grains: Corn, soy sag on profit-taking after USDA data

Midwest's winter wheat entering key growth phase

CBOT May 2021 corn with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. corn and soybean futures each fell about two per cent on Wednesday, a day after monthly U.S. Department of Agriculture (USDA) forecasts failed to offer fresh bullish news, freeing traders to book profits following recent multi-year highs, analysts said.

Wheat futures also declined, following the trend, with beneficial moisture expected to bolster crop prospects in the U.S. Plains this week.

Chicago Board of Trade May corn settled down 11-3/4 cents at $5.34 per bushel and May soybeans ended down 30-1/4 cents at $14.09-3/4 a bushel (all figures US$).

CBOT May wheat fell four cents to settle at $6.52-1/2 a bushel.

The benchmark CBOT soybean contract backed down from a near seven-year high set Monday at $14.60, while benchmark corn hit a 7-1/2-year high last month, driven up by export demand and uncertainty about the size of South America’s crops.

Argentina’s Rosario Grains Exchange on Wednesday cut its estimate of the country’s 2020-21 soybean harvest to 45 million tonnes, from 49 million previously, citing dry weather.

USDA on Tuesday trimmed its Argentine soy crop estimate to 47.5 million tonnes, from 48 million last month, but it raised its estimate of Brazil’s soy harvest to 134 million tonnes, from 133 million. USDA also raised its forecast of global ending stocks of both corn and soybeans, bucking trade expectations for a reduction.

“This time of year, where you didn’t get anything from the USDA with the crop report that the bull can point to, you can see some liquidation,” said Terry Linn, analyst with Linn + Associates.

Funds hold net long positions in CBOT corn and soybean futures, leaving the markets vulnerable to bouts of long liquidation.

Meanwhile, attention is starting to turn to the U.S. growing season with planting just a few weeks away in the Midwest, and dormant winter wheat crops entering a key growth phase. Storms are expected this week in portions of the Plains.

“That is helpful for winter wheat crops in the Plains and some of these dry areas in the western (corn) belt that really need the rains,” Linn said.

USDA is scheduled to release its U.S. planting intentions and quarterly grain stocks reports on March 31.

— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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