Chicago | Reuters — U.S. soybean futures fell on Thursday, pressured by the ongoing harvest of a projected record-large crop in Brazil and profit-taking after a two-session climb attributed to fund buying, traders said.
Corn futures and wheat futures closed lower, tracking broad declines in commodities. The 19-market Thomson Reuters CoreCommodity CRB Index fell nearly 1.3 per cent.
Chicago Board of Trade May soybean futures settled down 14-1/2 cents at $10.37-1/4 per bushel (all figures US$). May corn ended down 2-1/2 cents at $3.79-1/2 a bushel while May wheat fell 4-1/4 cents at $4.52-3/4 a bushel.
Soybeans sagged as estimates of Brazil’s soy harvest continued to rise. Private analytics firm Informa Economics raised its forecast of Brazil’s crop to a record-high 108 million tonnes, trade sources said, up two million tonnes from its previous estimate.
The figure is above the last monthly estimate from Brazil’s government agency Conab, which put the crop at 105.6 million tonnes, and the U.S. Department of Agriculture’s figure of 104 million.
“The No. 1 thing is good weather in South America along with no new bullish fundamentals,” said Mike Zuzolo of Global Commodity Analytics.
Corn and soyoil futures retreated after a two-day fund-driven rally, sparked in part by reports of potential changes to U.S. biofuel policy. Corn is the primary U.S. feedstock for ethanol and soyoil is used in biodiesel.
“There really just isn’t anything, at this point in time, in all this biofuel rumour mill. The market is realizing we are going to be waiting a long time for news on that,” said Dan Cekander of DC Analysis.
A coalition of trade groups representing oil, biofuels and other interests pressed the U.S. government on Thursday to deny requests to tweak the country’s biofuels program.
Wheat was pressured by strength in the dollar, which tends to make U.S. grains less competitive on the global market.
The dollar rose to seven-week highs against a basket of currencies after hawkish comments by a Federal Reserve official late on Wednesday encouraged investors to expect a near-term interest rate hike.
“Despite yesterday’s upward tendency, the U.S. dollar exchange rate is blocking further upward potential on the CBOT,” consultancy Agritel said in a note.
“Also, the favourable harvest outlook for 2017 in basically all major exporting countries is limiting price increases.”
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris.