Crop prices started the week generally lower
Slow exports and weakness spilling over from the soybean market depressed corn futures again Thursday. The USDA announced that China had cancelled previous purchases of 540,000 tonnes of soybeans from private sources early in the day, thereby exacerbating the negative impact of the weekly Export Sales report, which stated last week’s corn sales at very low levels once again. The agricultural markets also seemed to suffer from broad fund liquidation of long positions ahead of the holiday season. The March contract dove to the $6.87 1/2 level at one point, thereby partially filling the gap created as it shot higher in over the Independence Day holiday. The subsequent recovery may have created a technical reversal signal, but traders might need to see some favorable fundamental news before they will be willing to buy corn once again. March corn ended the day having fallen 6 1/4 cents to $6.96 3/4 and December dropped 9 1/2 cents lower at $6.04/bushel.
Thursday morning the USDA reported that China had followed Tuesday’s cancellation of 300,000 tonnes of soybean exports by cancelling another 540,000 tonnes from private sources. That news overrode the mixed effects of very strong soybean meal sales and weak oil movement on the weekly export report. January beans plunged to $14.02 3/4 per bushel in early trading, then spent the balance of the session at moderately higher levels. The ability to hold above the $14.00 level could inspire bottom picking from technical traders, but its ability to sustain a rebound from the latest lows remains to be seen. Still, technical and book-squaring considerations may play a big role in trading through the end of the year. January beans settled 28 cents lower at $14.09/bushel; January soybean oil fell 0.40 to 48.01 cents/pound and January meal tumbled $8.1 to $427.7/ton.
In a repeat of the early-week pattern, wheat struggled to stabilize in the face of large corn and soybean losses Thursday. That is, despite a supportive result on the weekly Export Sales report from the USDA, wheat futures dropped rather sharply in concert with its crop counterparts this morning. Neither supportive export news nor the potential for weather damage from the systems hitting the Southern and Central Plains this week and next seem likely to boost prices until corn and soybeans find their footing. Having the March CBOT contract drop below the $8.00 level won’t help the technical situation either, especially since one technical trading approach suggests it could test $7.75 in short order. March CBOT wheat closed 15 1/4 cents lower at $7.90 1/2 per bushel, while March KCBT wheat was down 13 3/4 cents to $8.44 1/4 and March MGE futures sank 11 1/2 cents to $8.84.