CHICAGO: US soybean, corn and wheat futures all declined on Tuesday, with soybeans leading the way down as favorable weather in the Midwest bolstered expectations of large crops, analysts said.
Front-month corn futures on the Chicago Board of Trade fell to the lowest in nearly two years and wheat dipped below $4 a bushel for the first time in a decade.
At the CBOT as of 12:38 p.m. CDT (1738 GMT), the benchmark November soybean contract was down 16-1/2 cents at $9.45 per bushel after slipping to $9.43, its lowest since mid-April. Technical selling accelerated as the contract dropped below its 200-day moving average near $9.55-1/2.
CBOT December corn was down 3 cents at $3.31-1/4 a bushel after setting a contract low at $3.29, and September wheat was down 3-1/4 cents at $4.02-3/4 a bushel after touching $3.99-1/4.
Prospects for robust US corn and soybean crops set the tone. Commodity brokerage INTL FCStone on Monday projected US 2016 corn production at 15.146 billion bushels and soybean production at 4.054 billion bushels. Both figures would be all-time highs, if realized.
Also Monday, the US Department of Agriculture raised its weekly soybean crop condition ratings and left its corn ratings unchanged, surprising analysts who expected a decline.
"The market is getting more comfortable that we are going to make these crops," said Terry Linn, analyst at Linn Associates, a Chicago brokerage. "The weather forecast gets you out through the middle of August, and you don't have any substantial threat to crop production," Linn said.
Commodity funds still held a significant net long position in CBOT soybeans as of last week, according to the latest weekly report from the Commodity Futures Trading Commission, leaving that market most vulnerable to long liquidation.
Funds were net short in CBOT corn and wheat.
Grains faced additional pressure from declining energy futures, with US crude oil sliding back below $40 a barrel on worries of an oil glut. The 19-market Thomson Reuters CoreCommodity CRB Index fell 0.8 percent to its lowest since April.
CBOT wheat firmed in early moves but retreated as corn and soybeans slipped, and the front wheat contract briefly fell below $4 a bushel before paring losses.
"Wheat prices have little fundamental support when the rest of the commodity sector is under pressure," INTL FCStone chief commodities analyst Arlan Suderman wrote in a note to clients.
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