Chicago | Reuters — U.S. soybean futures fell more than two per cent on Monday, with the front contract hitting a two-week low on long liquidation and improved crop weather for South America, analysts said.
Corn and wheat followed the weaker tone.
Chicago Board of Trade March soybean futures settled down 26-1/2 cents at $10.22-3/4 per bushel after dipping to $10.19-1/4, the contract’s lowest since Jan. 12
CBOT March corn ended down 4-3/4 cents at $3.57-3/4 a bushel and March wheat fell 6-1/2 cents at $4.14 a bushel.
Soybeans led the way down as traders responded to weekly commitments data released on Friday by the U.S. Commodity Futures Trading Commission.
The report showed non-commercial traders raised their net long position in CBOT soybeans in the week to Jan. 24 to 153,252 lots, the largest in six months, leaving the market vulnerable to long liquidation.
In corn, the CFTC showed large speculators flipped from a net short to a net long position for the first time since July.
“I really think it’s the CFTC numbers that got people on the defensive. You’ve got quite a few of these new longs on the hook, and the market loves to keep going after them when they get them that way,” said Jim Gerlach, president of A/C Trading in Fowler, Indiana.
Analysts also noted improving weather forecasts that have bolstered soybean prospects in Brazil, Argentina and Paraguay.
“Weekend rains may have caused slight delays in soybean harvest in some regions but are also benefiting later-developing crops… Bottom line, the soybean crop is getting larger in South America, not smaller,” MaxYield Cooperative market analyst Karl Setzer wrote in a note to clients.
Wheat and corn had background pressure from concerns of potential disruption to U.S. exports to Mexico amid a souring of relations between the two countries.
“The political tension between the United States and Mexico is also a factor depressing corn but it is hard to say if this will really reduce corn demand,” said Matt Ammermann, commodity risk manager at INTL FCStone.
Mexico was the top buyer of U.S. corn in the 2015-16 marketing year and the second-largest buyer of U.S. wheat, U.S. Department of Agriculture data showed.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting by Michael Hogan in Hamburg and Colin Packham in Sydney.