Glacier FarmMedia COVID-19 & the Farm

U.S. grains: Corn drops from peak, soybeans turn lower

Wheat firms on technical buying, Russia export worries

Chicago | Reuters –– U.S. corn futures declined on Monday on technical selling and profit-taking after stronger-than-expected weekly export sales earlier lifted the market to its highest in nearly six months.

Soybeans also turned lower after earlier hitting a 6-1/2 week high, pressured by technical selling and easing soymeal prices.

Wheat futures closed higher for the first time in three sessions, with gains tied to technical buying and concerns about Russian export curbs announced late last week.

Traders were squaring positions ahead of the end of the year and activity was thin in the holiday week, which exaggerated some market moves.

Chicago Board of Trade March corn surrendered two cents, or 0.5 per cent, to $4.12-3/4 a bushel and January soybeans shed 5-3/4 cents, or 0.6 per cent, to $10.41-3/4 a bushel (all figures US$). CBOT March wheat gained 4-3/4 cents, or 0.8 per cent, to $6.15-1/2 a bushel.

Corn had rallied to its highest since early July as export data released by the U.S. Agriculture Department on Monday showed stronger-than-expected sales in the latest reporting week.

U.S. corn export sales in the week ended Dec. 18 hit a 10-week high of 1.7 million tonnes, above trade forecasts for 500,000 to 800,000 tonnes.

“Corn export sales were massive and that supported the market earlier, but it wasn’t able to hold the gains, which is not good for corn technically,” said Joe Davis, vice president of commodity sales at Futures International.

Early strength in soybeans stemmed from worries about flood damage to the palm crop in Malaysia, the world’s second largest palm oil producer.

Severe monsoon flooding in Malaysia is likely to cause a bigger-than-expected disruption to crude palm oil production, which could bolster demand for soybean oil.

Traders downplayed reports of excessive rain in parts of Brazil and Argentina, two of the world’s top three soy growers, as both countries are still expected to produce bumper crops.

Forecasts for possibly crop-damaging cold in the U.S. Plains wheat belt offset price pressure from ample global supplies and generally sluggish export demand for U.S. wheat. Concerns about an export tariff on Russian exports further underpinned wheat.

A Canadian, U.S. and Australian wheat purchase by Iraq in a tender in which no Russian wheat was offered showed the potential for other exporters to benefit from dwindling Russian shipments.

But top importer Egypt was assured by Russia that it will receive wheat booked for January shipment.

— Karl Plume reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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