Reuters — Prices for U.S. grains and soybeans dipped on Monday, giving up slight early advances in thin, choppy trade that focused on plentiful global supplies.
The markets declined despite favourable weakness in the U.S. dollar and concerns about insufficient rains curbing Brazil’s soybean production.
Price movements and volumes were limited as the market wound down before the Christmas holiday on Friday.
“You have to factor in that we are in holiday timing and a lot of (traders) are not around. That tends to give you an erratic, choppy type of trade,” said Terry Linn, broker at The Linn Group in Chicago.
Oversupply and doubts about demand weighed on grain markets, he said.
Chicago Board of Trade March corn lost 2-1/2 cents or 0.6 per cent to $3.72 a bushel, while Chicago March wheat gave up 7-3/4 cents or 1.3 per cent to $4.79 a bushel (all figures US$.
Wheat markets face stiff export competition, with prices in Russia easing again last week and the agriculture ministry calling for an export tax to be cut or scrapped, according to Interfax.
Wheat production in Ukraine, however, could drop by one-third next year to 17.2 million tonnes after drought sharply cut the crop area, French consultancy Agritel said on Monday.
Earlier this month, the U.S. Department of Agriculture raised its outlook for domestic corn supplies more than expected, due to weakening export demand.
January soybeans shed one cent, or 0.2 per cent, to $8.91-1/4 a bushel, weakened by profit-taking and ample global supplies. The contract earlier hit its highest since Dec. 7 at $8.96-1/4 a bushel.
The prospect that farmers in Argentina will liquidate stored grain and soybeans after the country’s currency devaluation and export tax cuts could stiffen competition for U.S. soybeans, which have achieved strong sales to China in recent weeks.
“Concerns over Brazilian weather have supported soybean prices, but the market needs more bullish news to make further gains,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.
Brazil’s 2015-16 soybean crop forecast was lowered to 97.9 million tonnes, from 101.1 million previously, because of irregular rainfall in the center-west and smaller northern and northeastern grain belts, local analyst Franca Junior said on Friday.
Weekend rain was patchy in the center-west region and, despite more showers in the next couple of days, about 20 percent of Brazilian soybeans could still be facing stress, the Commodity Weather Group said in a note.
— Rod Nickel is a Reuters correspondent covering the ag and mining sectors from Winnipeg. Additional reporting for Reuters by Michael Hirtzer in Chicago, Naveen Thukral in Singapore and Gus Trompiz in Paris.