U.S. soy, corn off on poor export demand; wheat weak too
U.S. corn and soybean futures dropped on Tuesday, pressured by improving weather for the crop in Brazil and slumping demand for U.S. exports, traders said.
"Brazilian weather is about as close to perfect as you are going to get," said Sterling Smith, futures specialist for Citigroup in Chicago. "That is taking a little bit of risk premium out of the market."
In Brazil, some much-needed dry weather was expected through Thursday, giving farmers time to plant corn and soybeans. The forecast calls for storms to bring 1/2 inch to 1 inch this Friday and Saturday, with intermittent scattered showers expected for next week, said John Dee, meteorologist for Global Weather Monitoring.
U.S. wheat futures, which have dropped for four days in a row, also were lower due to technical selling. The Chicago Board of Trade benchmark soft red winter wheat contract has fallen nearly 4 percent over that time even though top wheat buyer Egypt purchased U.S. supplies for the first time in months.
Traders said the soybean market also was technically weak after failing to close above the 200-day moving average on Monday. Prices briefly pushed throughout that level but were unable to hold support.
At 10:19 a.m. CST (1619 GMT) , CBOT January soybeans were down 9 cents at $14.39-1/4 a bushel. CBOT March corn was 3-1/4 cents lower at $7.51-1/2 a bushel and CBOT March wheat was down 4-1/2 cents at $8.56-1/4 a bushel.
Wheat's failure to rise above its 50-day moving average following the Egypt deal spurred the technical sales earlier this week.
The improving weather in South America threatens to further erode demand for U.S. corn and soybeans on the export market. Taiwan's Maize Industry Procurement Association (MIPA), formerly known as Taiwan's Members Feed Industry Group (MFIG), purchased 60,000 tonnes of corn to be sourced from Brazil in a deal late last week, European traders said on Tuesday.
Poor soy crushing margins in China raised the prospect of a boost to stocks of the oilseed in the United States as the world's top buyer cuts back its purchases, Citigroup's Smith said.
Australia lowered its forecast for wheat production this year, the cuts were already factored into the market, traders said.
The Australian forecast for the 2012/13 marketing year was lowered from an estimate of 22.54 million tonnes in September and follows a record harvest of 29.5 million tonnes last year, data from the government's commodities forecaster showed on Tuesday.
Wheat production was curbed by poor rainfall on the east coast and Western Australia, the largest wheat producing areas.
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