Chicago | Reuters — Benchmark U.S. corn futures fell to an 18-month low on Wednesday on news that China cancelled purchases of U.S. corn, and as favourable early-season crop weather bolstered projections for bumper U.S. harvests this year, analysts said.
Wheat futures tumbled 3.4 per cent after the Black Sea grain deal, allowing for the export of grain from war-torn Ukraine, was extended for two more months. Soybean futures also hit multi-month lows.
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Chicago Board of Trade July corn settled down 19-3/4 cents at $5.61-1/2 per bushel after falling to $5.54-1/4, the lowest on a continuous chart of the most-active corn contract since November 2021 (all figures US$). New-crop December corn, representing the 2023 harvest, ended at $4.99 a bushel, dropping below psychological support at $5.
CBOT July wheat fell 22 cents to finish at $6.25-1/2 a bushel after hitting $6.16, its lowest level since May 3, and July soybeans settled down 27 cents at $13.37 a bushel after falling to $13.32-3/4, the lowest for a benchmark soybean contract since July 25, 2022.
Corn futures flopped after the U.S. Department of Agriculture said private exporters cancelled purchases of 272,000 tonnes of old-crop U.S. corn earmarked for China, the fourth such cancellation in the last month.
“The market is so spooked on the demand side,” said Don Roose, president of Iowa-based U.S. Commodities, noting that traders are already wary of strong competition for export business from Brazilian corn and soy supplies.
Meanwhile, the 2023 U.S. corn and soybean crops are off to a good start, with a faster-than-average planting pace and mostly good weather pointing toward rising supplies.
“Planting progress is good, and the weather forecast looks good. The funds are just selling it, and there is not much of a reason to be long anything at the moment,” said Sherman Newlin, an analyst with Risk Management Commodities.
On the global front, the Ukraine Black Sea grain deal ‘s extension comes a day before Russia could have quit the pact over obstacles to its grain and fertilizer exports.
Turkish President Tayyip Erdogan announced the extension in a televised speech and it was later confirmed by Russia, Ukraine and the United Nations.
— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
