U.S. grains: Corn down on profit-taking, trade worries

Chicago | Reuters — U.S. corn futures fell nearly two per cent on Tuesday on profit-taking after hitting multi-month highs and uncertainty about how U.S. trade policy will affect grain exports, analysts said.

Wheat followed corn lower but soybeans turned higher in the final minutes of trade.

Chicago Board of Trade March corn settled down 6-1/4 cents at $3.63-1/4 per bushel, retreating after reaching $3.71, its highest since mid-July (all figures US$).

CBOT March wheat ended down 6-1/2 cents at $4.26-3/4 a bushel while March soybeans finished up 3/4 cent at $10.58-1/2 a bushel.

Corn was the biggest mover on a percentage basis, turning lower after rising in early moves.

“Profit-taking hit corn prices when the lead March contract failed an early probe above the 200-day moving average, which then weighed on soybeans and wheat as well in the absence of fresh fodder to feed the bulls,” INTL FCStone chief commodities analyst Arlan Suderman wrote in a note to clients.

Corn got a boost when the U.S. Department of Agriculture said private exporters in the last day sold 125,000 tonnes to unknown destinations.

But some analysts cited worries about prospects for U.S. agricultural trade, given President Donald Trump’s plan to renegotiate the North American Free Trade Agreement with Mexico and Canada and his abandonment of the Trans-Pacific Partnership trade pact with Asian countries.

Mexico’s economy minister said the country could pull out of NAFTA if a renegotiation of its terms does not benefit its economy.

“I do think … that a cloud over all these (grain) markets is what the new ‘America first’ trade agenda means for agriculture,” said Rich Feltes, vice president for research with R.J. O’Brien.

“However they (trade agreements) may have been condemned by both sides during the election cycle, one of the great untold stories is they have been a tremendous benefit to U.S. agriculture,” Feltes added.

Soybean futures staged a late rally and halted a three-session slide that had been tied to improving crop weather in Argentina following floods this month. Argentina is the world’s largest soymeal exporter and No.3 exporter of soybeans.

Private analytical firm Informa Economics raised its projection of U.S. 2017 corn plantings to 90.489 million acres, from 90.151 million last month. Informa trimmed its 2017 soybean plantings forecast to 88.647 million acres, from 88.862 million previously.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral and Sybille de La Hamaide.

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