CANBERRA: Chicago soybean futures fell to a three-year low on Wednesday due to plentiful supply and a strengthening US dollar that made US agricultural products less attractive to importers.
Corn futures also dipped to a three-year low, with the market well-supplied by a record US crop, while wheat dropped by more than 2% amid pressure from declining Russian export prices.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was down 0.8% at $11.76-3/4 a bushel by 0619 GMT after touching $11.76, the lowest since December 2020.
CBOT corn fell 0.6% to $4.28 a bushel, matching a three-year low reached several times in recent days.
Wheat slid 2.3% to $5.84 a bushel, its lowest level in a month and slipping back towards last September’s three-year low of $5.40.
The US dollar shot to a three-month high against a basket of major currencies on Tuesday after data revealed higher-than-expected US inflation in January.
“The dollar index has risen dramatically, causing US-origin grains and oilseeds to look expensive,” said Andrew Whitelaw at agricultural consultants Episode 3.
Brazil 2023/2024 soybean crop forecast trimmed
Adding pressure are reduced demand for soybeans and ample supply of cheap Brazilian beans, he said. Rainfall in South America has also boosted the outlook for soy and corn production there.
Analysts expect the US soybean crush to have slowed in January as frigid weather disrupted operations at processing plants, reducing local demand.
Commodity funds - which hold large net short positions in US grain futures - were net buyers of Chicago corn but net sellers of soybeans and wheat on Tuesday, traders said.
A drop in crop prices and rising production costs are set to slash US net farm income this year.
France’s farm ministry reduced its estimates of winter grain sowing, with the soft wheat area seen at its second lowest in 30 years, after heavy rain disrupted field work.
Farmers in Ukraine, a major global corn grower and exporter, are expected to reduce the area sown with corn by 9% year-on-year in 2024, an agriculture ministry survey showed.
Ukraine is on track to export all grain from its 2023 harvest despite Russian attacks on Ukrainian ports and infrastructure, Britain’s foreign office said.
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