U.S. grains: Soybeans extend losses on fund selling, favorable weather

Chicago / Reuters – U.S. soybean futures fell sharply on Monday, extending the steep declines seen last week on pressure from investment fund selling and favourable extended weather outlooks for the developing crop, traders and analysts said.

Wheat and corn futures each were narrowly lower at the Chicago Board of Trade, with wheat reversing from earlier gains that were linked to crop concerns in Europe.

“Soybeans led the way lower this morning, with minimal weather threats seen through Aug. 8,” INTL FCStone analyst Arlan Suderman said in a note to clients. “Soybeans can still be adversely affected enough to dramatically tighten the balance sheet next month, but a legitimate threat still does not appear to be on the radar.”

Soybean futures were trading at the lowest levels since April and on pace for their second straight session of declines of about 2 percent. The most-active November soy contract eased 21-3/4 cents to $9.66-1/2 per bushel as of 12:18 p.m. CDT (1718 GMT).

Speculative investors have built up a large net long, or bullish, stake in soybean futures, compared to bearish net short bets in both corn and wheat, according to U.S. Commodity Futures Trading Commision data released on Friday.

With extended weather outlooks showing normal amounts of precipitation in the Midwest crop belt, the investors were unwinding those long positions, analysts said.

CBOT September corn was down 2-1/2 cents at $3.32-1/2 per bushel, holding above their contract low of $3.26-3/4 reached on Friday.

CBOT September wheat was down 3/4 cent at $4.24-1/2 after earlier trading as high as $4.35-1/4.

Wheat gained early in the session on prospects for smaller harvests in the top exporting region of the European Union, before succumbing to broad selling in commodities and bountiful global grain supplies.

Prospects for the soft wheat harvest has deteriorated sharply in Europe due to worse-than-forecast damage from torrential spring rain, prompting analysts to cut crop estimates in top grower France to their lowest in 13 years.

Consultancy ODA Groupe expects the French 2016 crop to be less than 30 million tonnes, down from 32 million seen last week and 35 million in a July 6 estimate, it told Reuters on Friday. The 2015 crop was at a record 41 million tonnes.

Additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris; editing by David Evans, G Crosse

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