U.S. grains: Corn, wheat down to contract lows

Chicago | Reuters — U.S. corn and wheat futures fell to life-of-contract lows on Monday, anchored by plentiful global grain supplies, and soybeans sagged as forecasts called for beneficial rains in Argentina, analysts said.

Chicago Board of Trade March corn settled down 3-3/4 cents at $3.49 per bushel after hitting a contract low at $3.48-1/4 (all figures US$).

CBOT March wheat ended down 5-1/2 cents at $4.13-1/2 a bushel after dipping to $4.10-3/4, the lowest price for a most-active contract since Jan. 4.

January soybeans finished down 7-1/4 cents at $9.82-1/2 a bushel.

Wheat posted the biggest decline in percentage terms, pressured by bumper global inventories. A higher-than-expected official estimate of Canadian output last week added to bearish sentiment, offsetting doubts over the weather-hit Australian harvest.

The drop in futures appeared to attract fresh export business. After the CBOT close, Egypt’s main state wheat buyer, the General Authority for Supply Commodities, set an international purchase tender for wheat. Results were expected on Tuesday.

The CBOT March wheat contract recorded its sixth straight lower close and had a knock-on effect on corn futures.

“Continual contract lows in wheat are not good news for corn,” said Ted Seifried, chief market strategist with Zaner Ag Hedge.

Soybeans declined on light weekend rains in crop areas of Argentina and forecasts for more moisture next week, which eased worries about dryness stressing crops in the South American country. Argentina is a key soybean producer and the world’s top exporter of soymeal and soyoil.

“Light showers favored Cordoba and northwestern Santa Fe over the weekend, but amounts were too light to significantly improve soil moisture,” MDA Weather Services said in a note to clients.

“Showers should become more widespread and heavier during the six- to 10-day period, which would finally lead to some notable improvements,” the MDA note added.

Additional pressure stemmed from the slow pace of U.S. soybean exports despite a record-large harvest this autumn. Export bookings of U.S. soybeans are running behind the year-ago pace, while the U.S. Department of Agriculture has projected a year-on-year increase for the 2017-18 marketing year that began Sept. 1.

“We are still falling behind, and that’s a growing concern. Can we hit the USDA’s (2017-18 soy export) number? It’s too early to say we can’t, but it’s becoming less likely,” Seifried said.

USDA could revise its soy export forecast as soon as Tuesday, when it is set to release the monthly supply/demand report.

— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Colin Packham in Sydney and Gus Trompiz in Paris.

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