Glacier FarmMedia COVID-19 & the Farm

U.S. grains: Corn slides on technicals, hefty global stocks

corn harvest
(Allan Dawson file photo)

Chicago | Reuters — U.S. December corn futures fell to a life-of-contract low on Tuesday on technical selling and ample global supplies, traders said.

Soybeans also fell as slightly wetter forecasts for crop areas of Argentina eased near-term concerns about dryness. But wheat closed higher on bargain-buying after most months sank to contract lows.

Chicago Board of Trade December corn settled down 2-1/2 cents at $3.36-1/4 a bushel after dipping to $3.35-3/4, a contract low (all figures US$).

CBOT January soybeans ended down three cents at $9.93 a bushel. December wheat finished up 1-1/4 cents at $4.10-3/4 after hitting a contract low at $4.05-1/4.

Corn slid on lacklustre demand as a bumper U.S. harvest wound down, and crop weather in South America looked benign for the moment.

“The big picture is that markets are oversupplied. There has been nothing to jar the managed funds from these large short positions in corn and wheat,” said Rich Feltes, vice president for research with R.J. O’Brien.

The U.S. Department of Agriculture late Monday said the U.S. corn harvest was 95 per cent complete.

USDA on Tuesday released long-term U.S. crop forecasts projecting that U.S. corn plantings would rise to 91 million acres for the 2018-19 marketing year, up from 90.4 million for 2017-18 but down from 94 million in 2016-17.

USDA said U.S. corn stocks at the end of the 2018-19 marketing year, on Aug. 31, 2019, would grow to 2.607 billion bushels, from 2.487 billion at the end of 2017-18.

For soybeans, USDA expects plantings to rise to 91 million acres in 2018-19, topping the record high set in 2017-18 at 90.2 million. But it forecast 2018-19 soybean ending stocks tightening to 376 million bushels, from 425 million at the end of 2017-18.

CBOT wheat futures closed on a late round of short-covering after spending most of the session in negative territory. Plentiful world wheat supplies and strong competition for export business continue to act as an anchor for prices.

“Fundamentally nothing has changed, every year production is hitting record highs. We are not going to see higher prices in such an environment,” said Phin Ziebell, an agribusiness economist at National Australia Bank.

Underscoring the challenging export scenario for U.S. wheat, Egypt’s main state grain buyer said it bought 120,000 tonnes of Russian wheat in an international purchase tender. No U.S. wheat was offered.

— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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