U.S. grains: Corn, wheat, soy retreat in technical year-end trade

Chicago/Reuters – U.S. corn, wheat and soybean futures fell on Wednesday in technically driven trade as investors squared positions toward the end of the year and the dollar firmed, analysts said.

Additional pressure stemmed from easing concerns about crop weather in South America. Chicago Board of Trade March corn futures settled down 6-3/4 cents at $3.48-1/4 per bushel.

March wheat fell 8 cents at $4.01-1/2 a bushel and March soybeans slid 7-3/4 cents to $10.16-1/2.

All three markets retreated after rising a day earlier due in part to worries about dry conditions stressing corn and soybeans in portions of Argentina and northern Brazil.

“Today some of the concern has moderated on the weather; being a little more realistic assessment in terms of conditions and production potential,” said Terry Linn, an analyst with Linn & Associates.

A typical drop in trader participation between the Christmas and New Year’s Day holidays was likely contributing to gyrations in grain prices this week, Linn and others said.

“We are in the final three trading sessions of the year,” Linn said. “That leads to some exaggerated moves in the markets, in both directions.”

A stronger dollar added to bearish sentiment, theoretically making U.S. grains less attractive to holders of other currencies.

The dollar index rose on concerns over next year’s Brexit negotiations and expectations of higher U.S. economic growth.

“The U.S. dollar shooting up is compounding things,” said Terry Reilly, grains analyst with Futures International.

Wheat fell after climbing to a one-week high a day earlier.

“On wheat, there are also no major factors visible today that would sustain the large upward movement on Tuesday, which was partly caused by fund money flows,” said Matt Ammermann, commodity risk manager at INTL FCStone.

“However, the short-covering rally in wheat seen on Tuesday could still continue with some more follow-through strength possible for a couple of days.”