Chicago | Reuters — U.S. soybean futures slid to seven-week lows on Monday after weekend rains across major exporter Argentina reduced the likelihood that dry weather would curb yields.
Wheat futures dropped to a one-month low and corn dropped to its lowest level in three weeks as losses in other markets, including equities and energy, added pressure to grain prices.
Soybean traders focused on Argentina after storms brought moisture to dry fields during a key time for crop development. The country is the world’s top exporter of soyoil and soymeal, and the No. 3 supplier of soybeans.
“This was a critical weekend for them,” said Jim Gerlach, president of A/C Trading in Indiana.
March soybeans on the Chicago Board of Trade closed down five cents at $8.62-1/2 a bushel (all figures US$). The front-month contract traded as low as $8.61-1/2, the lowest price since Dec. 17.
Favourable crop weather in South America also weighed on CBOT corn prices, with the March contract ending down 3-1/2 cents at $3.62-1/4 a bushel. CBOT March wheat fell 8-1/4 cents to $4.58-1/2 a bushel.
Commodity funds sold an estimated net 5,000 soybean contracts, 11,000 corn contracts and 6,000 wheat contracts.
Traders have been on edge about weather conditions in Argentina because drought has already caused irrecoverable corn crop losses in some areas, according to an analyst at the country’s main grain exchange.
In the U.S., the market was turning its attention to U.S. Department of Agriculture supply and demand forecasts due on Tuesday.
Analysts polled by Reuters expect USDA in its monthly supply outlook to show larger U.S. grain supplies but slightly lower world stocks.
The agency, in a separate report, said private exporters reported sales of 100,000 tonnes of U.S. corn for delivery to Mexico during the marketing year that began on Sept. 1.
In other export news, top wheat buyer Egypt on Sunday sought to reassure markets after weeks of confusion over the allowed limits of ergot rattled traders.
Markets in top soy buyer China are closed this week for the Lunar New Year holiday, with trading set to resume on Feb. 15.
“The fear is that lower trade volumes because of the Asian holiday could accentuate down moves” if Tuesday’s USDA report pressures markets, said analyst Tomm Pfitzenmaier of Summit Commodity Brokerage in Iowa.
“The bean market has little to support prices, with no problems in South America.”
— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Nigel Hunt in Paris and Colin Packham in Sydney.