Chicago | Reuters — U.S. soybean futures sagged to their lowest in more than two months on Thursday, weighed down by forecasts for much-needed rains in Argentina, traders said.
Wheat futures closed firm, supported by strong export data, while corn slipped.
The most-active soybean contract on the Chicago Board of Trade dropped 1.2 per cent. Soybean futures have fallen for six of the last seven sessions.
“Argentina’s dry soybean crops remain an important prop for the market,” Commonwealth Bank of Australia analyst Tobin Gorey said in a market update. “(But) weather forecasters are becoming less confident the hot and dry conditions will persist. Any suggestion of a rain event for the region might quickly undermine soybean prices.”
Rains expected this weekend in Argentina’s main soy and corn growing areas will provide some relief to drought-stricken parts of the country’s central farm belt.
CBOT January soybean futures closed 11-1/2 cents lower at $9.67-3/4 a bushel (all figures US$). Prices bottomed out at $9.66-1/2 a bushel, their lowest since Oct. 12.
The Rosario Grains Exchange boosted its estimate of Argentina’s soybean crop on Wednesday evening, which weighed on the soy complex throughout Thursday’s session.
“That backs up the talk we have heard for weeks from down there that the trade simply is not worried in the least about a little dryness early in the planting and growing window,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a note to clients.
Soybean futures also hit technical resistance following Wednesday’s rally, with the January contract failing to hold support above the 100-day moving average.
CBOT March soft red winter wheat futures were 1-1/2 cents higher at $4.18-1/4 a bushel.
The U.S. Department of Agriculture early on Thursday said weekly export sales of wheat totalled 598,400 tonnes, topping market forecasts that ranged from 250,000 tonnes to 450,000 tonnes. A week ago, wheat export sales were 323,034 tonnes.
Dealers said, however, that supplies remained abundant, keeping a lid on any potential gains in wheat futures.
Farm office FranceAgriMer cut its outlook for French 2017-18 soft wheat exports outside the European Union on Wednesday for the second month in a row to take account of intense competition on world markets.
CBOT March corn futures ended down 1/2 cent $3.48-1/2 a bushel.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago; additional reporting by Naveen Thukral in Singapore and Nigel Hunt in London.