Chicago | Reuters — Forecasts for crop-boosting weather in key growing areas of the U.S. Midwest pushed corn and soybean futures to multi-month lows on Thursday, traders said.
Wheat futures also were sharply lower, their second straight day of steep declines, with investors continuing to push back against a sharp rally on Tuesday amid abundant global supplies.
Traders noted investment funds selling off long positions in all three commodities.
The latest weather outlook raised expectations for the U.S. harvest of both corn and soybeans as the crop nears key development stages.
“We’ve got rain just ahead of this big heat coming,” said Don Roose, president of U.S. Commodities. “I guess you’d call that ideal. If you are coming off of planting and the crop is up and ratings are high, it’s buyer beware. The funds got caught big long, and they are liquidating.”
Chicago Board of Trade July soybean futures settled down 8-3/4 cents at $9.27-1/4 a bushel, its eighth down day out of the last nine sessions (all figures US$). Soybean futures have lost 9.3 per cent during that span.
Prices for the most-active soybean contract, bottomed out at their lowest since Aug. 16.
Concerns about trade tensions with China, the largest buyer of the oilseed, have hung over the market throughout the bearish stretch.
CBOT July corn was down 13 cents at $3.63 a bushel. The most-active contract hit its lowest since Feb. 9.
CBOT July soft red winter wheat futures were 15 cents lower at $5.01-1/2 a bushel.
Strength in the U.S. dollar added to the weakness in wheat. A strong dollar chills demand from overseas buyers looking for U.S. wheat as it makes dollar-denominated commodities relatively more expensive.
U.S. wheat prices had risen nearly four per cent on Tuesday after the U.S. Department of Agriculture (USDA) cut its forecast for Russia’s crop but lost most of those gains on Wednesday, with overall global supplies still seen as ample.
“While this initial strength was on the back of a downgrade to the Russian wheat crop, the market appears to be coming around to the fact that global inventories are still significant, and in fact the USDA revised higher their 2018-19 ending stock forecast,” ING said in a market note.
Dealers said that competition from the Black Sea region is likely to remain tough despite the Russia crop downgrade.
— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Julie Ingwersen in Chicago, Naveen Thukral in Singapore and Nigel Hunt in London.