Chicago | Reuters — U.S. corn futures sank to their lowest levels of the year on Wednesday on fund-driven technical selling and plentiful global grain supplies, analysts said.
Chicago Board of Trade wheat futures rose on bargain-buying after front months fell to contract lows, while soybean futures firmed modestly.
CBOT December corn settled down 4-1/4 cents at $3.55-3/4 per bushel (all figures US$). Technical selling accelerated as the contract dropped below its previous contract low of $3.58-1/2.
CBOT September corn dipped to $3.41-1/2, the lowest spot corn price on a continuous chart since December 2016.
“In a market this weak, contract lows are a target,” said Don Roose, president of U.S. Commodities, adding that hefty global inventories of corn and wheat continue to hang over the market.
“We have a big enough carry-out and South America had huge crops, and Russia had a huge crop, and China’s crop is substantial to large. It’s just a lot of grain,” Roose said, “not just in the U.S. but the world, and it’s trying to find a home.”
Also bearish, the Farm Journal Midwest Crop Tour late on Tuesday projected above-average corn yield potential in Indiana and Nebraska. Scouts were touring Illinois and western Iowa on Wednesday.
CBOT December wheat ended up one cent at $4.30 per bushel while November soybeans finished 1/2 cent higher at $9.38 a bushel.
Soybeans drew support from expectations for increased domestic demand for soyoil, after the U.S. government late on Tuesday imposed duties on imports of Argentine and Indonesian soy biodiesel. Soyoil is the primary feedstock for biodiesel fuel.
But trade was choppy. Soybean futures turned lower at times, pressured by news from the U.S. Department of Agriculture that private exporters cancelled sales of 640,970 tonnes of U.S. soybeans sold to China for delivery in the 2016-17 marketing year.
“Cancellations by China on the beans has been a little bit of an anchor today,” Roose said.
— Reporting for Reuters by Julie Ingwersen and Michael Hirtzer in Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Sybille de La Hamiade in Paris.