Chicago | Reuters –– U.S. corn and wheat futures fell on Wednesday, setting back from two days of gains on profit taking as speculators locked in gains on recent short-covering rallies, traders said.
“The funds have gotten heavy long up here,” said Mark Gold, managing partner with Top Third Ag Marketing in Chicago. “This is strictly a fund game. I have not seen a real fundamental reason for the break.”
Soybeans edged higher, supported by signs U.S. exporters were picking up some business amid a slowdown in the South American harvest.
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Chicago Board of Trade soybean futures hit their highest level in more than a week on Thursday as technical buying helped the market recover from a three-month low reached on Monday, analysts said.
Chicago Board of Trade soybeans for May delivery ended up 1-1/4 cents at $10.19 a bushel (all figures US$).
The U.S. Agriculture Department announcement on Wednesday morning that U.S. exporters sold 393,000 tonnes of soybeans to unknown destinations.
Argentina’s soybean crop has taken a hit with heavy rains at the time of harvest curbing yields. The Buenos Aires Grains Exchange has dropped its 2015-16 soybean crop estimate to 56 million tonnes from a previous forecast of 60 million tonnes.
Wheat notched the biggest decline, sinking 1.1 per cent. Rains in the U.S. Plains, which will foster development of what is already expected to be an ample crop, added pressure.
“Wheat got another dousing of rain over the hard red winter areas,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a note to clients. “With that, and forecasts for squeezing out the sponge over the hard red winter wheat areas again next week, the market was under pressure all day long.”
CBOT May wheat fell 5-1/2 cents to close at $4.74-1/4 a bushel while CBOT May corn fell 1-1/2 cents to $3.80-3/4 a bushel.
Dealers noted that forecast rains in Brazil this week would provide welcome relief to a parched corn crop there but losses from recent dry weather are still widely anticipated.
“The (corn) market is torn between a bullish dryness story in Brazil and bearish pressure from a large U.S. acreage,” Rabobank said in a market update.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Nigel Hunt in London.
