U.S. grain futures stumbled Monday, as investors continued to reduce risk exposure in the face of uncertain global economics and caution ahead of government forecasts on inventories and acreage.
Both corn and wheat have sold off sharply in recent weeks, with corn down roughly 15% this month due to an exodus of investors and improving crop weather.
Traders are unwilling to take on risk following recent heavy selling by investment funds, said Shawn McCambridge, senior grains analyst with Prudential Bache in Chicago. Traders are fearful of funds liquidating additional positions if a vote on a Greece austerity plan fails to pass Wednesday, McCambridge said.
CBOT December corn dropped 0.8%, to $6.26 3/4 a bushel.
Corn prices were driven lower by favorable weather for the U.S. crop that is developing. The absence of threatening crop weather in the Midwest encouraged projections that output may exceed previous outlooks. Corn futures continue to extract price premium fueled by spring planting problems.
Fresh export demand and buying by domestic grain users provided mild support for prices to bounce off initial lows, McCambridge added.
The U.S. Department of Agriculture disclosed Monday that 230,000 metric tons of corn was sold to unknown destinations. Traders speculated that the sales were to China.
Wheat slumped on seasonal pressure from the harvest and continued broad-based commodity selling. Outside markets, particularly corn, also weighed, and traders noted that reports of cheap Russian exports added to the pressure.
CBOT September wheat dropped 10 1/2 cents, or 1.6%, to $6.50 3/4 per bushel; KCBT September wheat fell 20 1/4 cents to $7.47; MGEX ended down 15 3/4 cents, or 1.9%, to $8.02 3/4.
U.S. soybean futures climbed in the face of negative outside-market influences, buoyed by a fresh old-crop export sale to China. The unexpected old-crop business supported soybeans, allowing the market to break away from the clutches of investment-fund selling that engulfed neighboring grain futures, said Jack Scoville of Price Futures Group.
CBOT November soybeans rise 5 3/4 cents to $13.15/bushel.
CBOT December soymeal moved up $2.60 at $339.50/short ton; December soyoil was off 0.16 cent to 56.20 cents/pound.
U.S. rice futures fell under the weight of speculative-fund selling that filtered through grain futures. The market is anticipating a bearish inventory report from government forecasters this week and, without fresh export demand, buyers were content to sit on the sidelines, said Scoville.
CBOT September rice settled down 1.2% at $14.33/hundredweight.
Ethanol futures fell in unison with corn futures Monday, as it is the primary input for U.S. ethanol processing.
Ethanol for December delivery dropped 1.3%, to $2.315 per gallon.
Oat futures stumbled Monday, succumbing to continued fund-long liquidation. The investor selling pressure overshadowed ongoing concerns about lost acreage in the U.S. and Canada, said McCambridge.
The September contract was down 1.2%, to $3.36 a bushel.