CHICAGO: Chicago soybean futures slid on Friday on expectations of large US yields and profit taking following a rally earlier in the week sparked by speculators unwinding large short positions, traders said.
Wheat and corn futures also dipped as funds sought profits and positioned ahead of two US Department of Agriculture reports that will be released next week.
All three crops were nevertheless on track for weekly gains. The most-active wheat contract on the Chicago Board of Trade settled down 7-3/4 cents to $5.67 per bushel but settled up 2.8% for the week. CBOT soybeans settled down 18-1/2 cents to $10.05 per bushel and settled up 0.5% for the week. Corn settled down 4-1/2 cents to $4.06-1/4 per bushel. The rallies were driven by speculators unwinding some of their hefty short positions.
A weaker dollar and some concerns over dry weather in the US Midwest had encouraged short covering in previous days, traders said. Light rain is expected across chunks of the US Midwest, a note from Commodity Weather Group said, but it may be too little too late to ensure the soybean crop has enough moisture to reach its yield potential. Many traders are waiting for the US Department of Agriculture to release its September crop estimates next week before making big moves.
“The USDA report next Thursday is expected to confirm high yields, but whether they’ll be as high as what was reported remains to be seen,” Brian Basting, analyst at Advanced Trading, said.
Wheat prices have been supported by reports of poor harvests in Europe, notably in the largest producer France, set to yield the smallest volume in more than 40 years while also producing mixed grain quality after heavy rain and limited sunshine during the growing season.
However, cheap wheat from Russia and increasing exports from Ukraine have maintained pressure on US wheat futures.
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