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U.S. grains: Corn, soy futures sag on end-of-month selling

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Chicago | Reuters – U.S. corn and soybean futures fell about 2 percent on Friday on technical selling and long liquidation at the end of the week and month, and on beneficial rains in portions of the Corn Belt, traders said.

Wheat futures ended modestly lower but posted a gain for the month of July.

Chicago Board of Trade December corn settled down 11-1/4 cents at $5.45-1/4 per bushel and November soybeans ended down 28-1/2 cents at $13.49-1/4 a bushel. CBOT September wheat fell 1-1/2 cents to finish at $7.03-3/4 a bushel.

Rains fell Friday in portions of South Dakota, Minnesota and northern Iowa, and some forecasts indicated more showers ahead that could help U.S. crop prospects.

“Overall, it’s weather, and end-of-week and end-of-month profit-taking,” Terry Reilly, senior analyst with Futures International, said of the declines in grain futures.

“In weather-sensitive markets, many traders don’t like to go home with a position on, knowing that the weather models can change on a dime,” Reilly said.

Commodity funds hold net long positions in CBOT corn and soybean futures, leaving the markets vulnerable to long liquidation.

Analysts also noted a bounce in the dollar, which tends to make U.S. grains less competitive globally. The dollar rose as upbeat economic data helped reverse some of the losses from earlier this week.

Traders await direction from the U.S. Department of Agriculture’s weekly crop condition ratings on Monday, and from private estimates of U.S. corn and soy yields ahead of the USDA’s big Aug. 12 crop supply/demand report.

CBOT wheat closed lower on Friday in sympathy with corn and soybeans, but still finished the month up 3.6 percent. Minneapolis Grain Exchange September spring wheat futures climbed 55 cents a bushel or 6.5 percent in July, following a 16 percent climb in June, as drought took hold in the northern Plains, threatening spring wheat crops.

An annual U.S. crop tour on Thursday projected the average spring wheat yield in North Dakota, the top-producing state, at 29.1 bushels per acre, the lowest in tour records going back to 1993.

The International Grains Council this week cut its 2021/22 world wheat crop outlook by one million tonnes to 788 million, with the diminished outlook for North America partially offset by improved prospects in the European Union.

– Additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris

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