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U.S. grains: Corn, wheat retreat on profit-taking

Grains pull back from multi-month highs

(Stephen Ausmus photo courtesy ARS/USDA)

Chicago | Reuters — U.S. wheat and corn futures declined on Thursday, retreating from early strength on profit-taking after each market set multi-month highs, analysts said.

Soybeans also closed lower, reversing from early advances, after the spot March contract fell short of last week’s high.

CBOT March corn settled down 5-1/4 cents at $3.73-1/2 per bushel after reaching $3.80, the contract’s highest since mid-July (all figures US$).

Funds have been pouring into the corn market, encouraged by recent demand from exporters and ethanol producers, along with expectations of a drop in U.S. seedings this spring.

Exchange data showed open interest in CBOT corn futures rose by more than 53,000 contracts on Wednesday as prices rose, an indication of fresh long, or bought, positions.

Concern that the market may be top-heavy appeared to trigger a sell-off, with the U.S. Commodity Futures Trading Commission set to release its weekly Commitments of Traders report on Friday.

“There is a fear of a large commitment-of-traders net long in corn in tomorrow’s report. And there some is liquidation ahead of first notice day,” said Dan Cekander, president of DC Analysis. First notice day for deliveries against CBOT March futures contracts is Feb. 28.

CBOT March wheat finished down 7 cents at $4.47-3/4 a bushel after reaching $4.64-1/4, the highest for a most-active wheat contract since late June.

Wheat got an early boost when the U.S. Agriculture Department reported export sales of U.S. old-crop wheat in the latest week at 569,100 tonnes, above trade expectations for 300,000 to 500,000 tonnes.

A weakening dollar, which makes U.S. exports more competitive on the export market, lent early support. Wheat is typically the agriculture commodity most sensitive to currency swings.

But wheat turned down and closed below the previous day’s low.

Soybeans followed the retreat in grains. CBOT March soybeans ended down 17-1/2 cents at $10.43-3/4 a bushel.

USDA reported stronger-than-expected soybean export sales in the week to Feb. 9, the latest data available, but demand may have slowed since then, some said.

“The China business out of the U.S. has slowed this week significantly,” Cekander said.

Additional pressure stemmed from favourable crop weather in South America, where the soybean harvest is underway.

— Julie Ingwersen and Mark Weinraub are Reuters correspondents covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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