U.S. grains: Soybeans slump on technical selling

Chicago | Reuters — U.S. soybean futures fell on Tuesday for the ninth time in 10 sessions on technical selling and forecasts for crop-boosting rains in South America.

Corn firmed on short-covering after touching contract lows, but prices remain capped by abundant supplies.

Wheat futures ended mostly lower, with only hard red winter wheat contracts posting small gains on worries about potentially crop damaging weather in the Plains.

Trading was light as investors moved to the sidelines ahead of the year-end holidays. Grain markets will close early on Friday and remain closed through Monday for the Christmas holiday.

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Chart-based selling added pressure to a soybean market already slumping from forecasts for beneficial rains in Brazil and Argentina, both large soy producers.

“A lot of the weakness has been because of rain in Argentina, and there is more rain in the forecast this week. But we’re really doing some major damage to the charts and that is leading to some technical selling,” said Brian Hoops, president of Midwest Market Solutions.

Soybean futures prices climbed above the November high early this month but have since fallen and breached the November low. The bearish technical indicator, known as an outside monthly reversal, is causing traders to square positions or limit long holdings in the market, Hoops said.

Chicago Board of Trade March soybeans fell 5-1/2 cents to $9.56 a bushel (all figures US$).

Dry conditions and a lack of snow cover in the U.S. Plains wheat belt have put recently planted hard red winter wheat at risk of damage from cold weather, which is expected to strike the region later this week.

Recent price declines in wheat have attracted fresh export interest in U.S. shipments.

U.S. wheat was the cheapest origin grain offered in an Iraqi tender for hard milling wheat.

“We’re starting to see U.S. values become more competitive in the world markets,” said Brian Basting, analyst with Advance Trading.

“But having said that, we’re not the only shop in town for wheat, with plenty of competition from the Black Sea and Europe. And they are now harvesting those crops in Argentina and Australia.”

CBOT March soft red winter wheat fell one cent to $4.19-1/2 a bushel while March hard red winter wheat gained 3/4 cent to $4.20 (all figures US$).

CBOT March corn rose 1/2 cent to $3.47-1/2 a bushel. March through September 2018 futures and May 2019 futures touched contract lows during the session.

— Karl Plume reports on agriculture and agribusiness for Reuters from Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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