U.S. grains: Corn slips after touching new high on Chinese demand

U.S. export, supply-demand data awaited for China update

Chicago | Reuters — U.S. corn futures ended lower on Thursday after hitting a 7-1/2-year high, supported by the U.S. Agriculture Department’s confirmation of strong Chinese demand.

Soybeans closed higher on strong weekly export sales as traders weighed rain delays to Brazil’s harvest. Wheat fell, despite weekly export sales at the high end of analysts’ expectations.

U.S. corn export sales reached 7.52 million tonnes in the week ending Jan. 28, according to USDA— the biggest week of sales on record, led by 5.86 million tonnes sold to China, though the market had already absorbed much of those sales when they were announced in daily export notices.

Weekly old-crop U.S. soybean export sales of 824,000 tonnes were above trade estimates, led by 598,900 tonnes to China.

“We had a nice showing across the board in the ag sector on the weekly sales,” said Mike Zuzolo, president of Global Commodity Analytics. He said soybean futures could rise further before USDA issues a monthly crop report on Feb. 9 amid supply concerns.

Most-active corn futures on the Chicago Board of Trade fell two cents to $5.50 per bushel, after reaching $5.58, its highest level since June 2013 (all figures US$). CBOT soybeans gained 1-1/4 cents to $13.72-1/2 per bushel, while wheat slid 10-3/4 cents to $6.37-1/2 per bushel.

“I could see the beans remaining firm against the corn and the wheat going all the way into the report,” Zuzolo said.

Meanwhile, Brazil’s agriculture minister said the country expects to harvest 133 million tonnes of soybeans and more than 103 million tonnes of corn, despite harvest delays caused by excessive rain. USDA’s local office reduced its estimate for Brazilian corn production to 105 million tonnes, versus the official USDA forecast of 109 million tonnes.

Brazil’s crops have suffered from a lot of rain, especially in the south, said Ed Duggan, senior risk management specialist at Top Third Ag Marketing. “Behind schedule harvest in Brazil, that’s delaying planting the second corn crop,” he said.

Wheat traders also were assessing the latest Russian announcement that it plans to launch a permanent mechanism to address its wheat export tax on April 1.

— Reporting by Christopher Walljasper; additional reporting by Gus Trompiz in Paris and Colin Packham in Canberra.

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