CHICAGO: US soybean futures extended losses on Tuesday and were on track for their biggest daily decline in seven weeks as funds liquidated long positions amid bearish chart signals and favorable US crop weather.
Corn and wheat also fell. All three markets posted downside reversals on Monday, with the front contracts closing lower after setting higher highs and lower lows than the previous session.
Soybeans were retreating after hitting a six-month high on Monday. The recent gains were driven by robust export demand for US soybeans amid production shortfalls due to dry weather in South America.
"Given the 'reversal' in the grains yesterday, we are going to exit the entire position this morning," commodities investor Dennis Gartman wrote Tuesday in his daily newsletter to clients.
Gartman told Reuters in a telephone interview that he sold a "very large" position in corn and sold a small number of positions in soybeans. He said he did not have positions in wheat.
At the Chicago Board of Trade as of 10:57 a.m. CDT (1557 GMT), May soybeans were down 19 cents at $13.47-1/2 per bushel. May corn was down 14 cents at $6.49-1/2 and May wheat was down 10 cents at $6.42-1/4.
Traders noted unusually mild weather in the US Midwest this week that should favor early planting of corn and soybean crops. Rain showers expected across parts of the US Plains and Midwest should benefit the developing winter wheat crop.
"I don't see anything fundamentally, other than favorable Northern Hemisphere weather," Dan Basse, president of AgResource Co in Chicago, said of the weak tone in the grain markets.
He noted that traders were adjusting positions ahead of key reports from the US Department of Agriculture next week on US planting intentions and quarterly grain stocks.
"We've got (USDA) reports next week, and the weather is favorable. Maybe we have digested much of the South American crop losses, and we're focused more on Northern Hemisphere weather," Basse said.
The market is anticipating an increase in US corn plantings from last year and little change in US soybean acreage.
Worries about a slowing pace of economic growth in China, the world's biggest soy importer, added pressure.
BHP Billiton, the world's biggest miner, said on Tuesday it was seeing signs of "flattening" iron ore demand from China, though for now it was pushing ahead with ambitious plans to expand production.
Additional pressure fell on the wheat market after Russia said there was no need to restrict grain exports during the current crop year, which saw the country emerge from a near-total ban to export record volumes.
Investors were watching an indefinite strike by Argentina's truckers seeking higher pay rates. Truckers parked their rigs in protest just as exporters were counting on them to haul freshly harvested soybeans to port.
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