CHICAGO: Chicago corn and soybean futures fell to fresh multi-month lows on Friday, pressured by a stronger dollar, tumbling equity markets and generally favourable US crop weather that has bolstered production prospects, analysts said.
Chicago Board of Trade July corn settled down 7 cents at USD4.17-1/2 per bushel, after hitting a life-of-contract low at USD4.16. For the week, the contract plunged by 29-1/4 cents a bushel or 6.5percent. CBOT July soybeans ended Friday down 8 cents at USD11.21-1/2 a bushel after dipping to USD11.17-1/2, a four-month low, and July wheat finished down 1-3/4 cents at USD5.80 a bushel after setting an eight-week low at USD5.78.
On a weekly basis, CBOT July soybeans fell 65-1/4 cents a bushel or 5.5percent, and July wheat declined by 30-1/2 cents or 5.0percent. Speculators appeared to be bailing out of long positions in corn and soybeans, following a sell-off on Wall Street after a blow-out jobs report fuelled bets of a rate hike by the US Federal Reserve. Additionally, the dollar firmed, making US commodities less competitive globally. “It’s a combination of a bearish grain situation, the strength in the dollar and the collapse in the equities.
With the exception of cattle (futures), there is nobody that is green,” Tom Fritz, a partner with EFG Group in Chicago said of the broad market weakness. Weather forecasts for US corn and soybean crops signalled improving production prospects. “Above-normal rainfall is expected across most of the (US) corn belt over the next 15 days, which should improve soil moisture and favour germination and early growth of corn and soybeans,” forecaster Vaisala said in a client note.
A lack of Chinese buying of US crops since a May summit, at which Washington said Beijing committed to purchase an additional USD17 billion worth of US agricultural goods per year, has also dented sentiment.
Some traders are concerned that the latest US tariffs proposed in relation to a probe over forced labour could undermine the agricultural trade commitments between Washington and Beijing.
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