CHICAGO: US grain and soybean futures extended losses on Tuesday after the US Department of Agriculture (USDA) boosted key crop supply forecasts and scaled back some demand expectations in a monthly report.
The agency’s supply-and-demand data heaped further pressure on grain values already weighed down by slumping outside market influences, including sharply lower energy prices and a stronger US dollar.
The USDA reduced its US corn demand view for the current season on Tuesday and raised its forecast for domestic corn production. It also cut its forecast for the country’s soybean harvest.
The bearish data overshadowed lingering concerns about crop-stressing heat and dryness across the US Midwest.
“They’re putting weather and supply issues on the back burner. The USDA helped feed that demand-led break to the downside,” said Mike Zuzolo, president of Global Commodity Analytics.
“The trade was looking for demand destruction, and they got it,” he said.
Chicago Board of Trade December corn dropped 45 cents to $5.84 per bushel by 12:29 p.m. CDT (1729 GMT), while November soybeans fell 58-3/4 cents to $13.46-1/4 per bushel. CBOT September wheat fell 35 cents to $8.21-1/2 a bushel.
Earlier weakness was fuelled by a fresh 20-year high for the dollar, which makes commodities priced in the currency more expensive, and weather charts suggesting some rain for the US Midwest in the week ahead.
Wheat added to steep losses from Monday, with news that talks will be held on Wednesday between Ukraine, Russia, Turkey and the United Nations over Ukraine’s war-disrupted grain exports also weighing on the market, traders said.
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