Chicago | Reuters –– U.S. grain and soybean futures fell on Friday as investor jitters about China’s economy continued to cool confidence in commodity markets and early data from a recent industry crop tour showed strong yield potential in the western Corn Belt.
Corn made a modest weekly gain after falling two per cent last week, but soybeans and wheat fell for a second straight week.
The CBOE (Chicago Board Options Exchange) Volatility Index, the market’s favoured barometer of volatility, highlighted some traders’ unease, hitting its highest in more than eight months.
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“It’s all global fears,” said Arlan Suderman, analyst with Water Street Solutions. “It’s ‘Dump commodities, dump equities and get to the sidelines.'”
Corn prices softened during trading on Friday after consolidating from a rally this week. But crop yield forecasts from Pro Farmer, which came out after its past week’s tour of Midwestern farmland, could support prices again next week.
Pro Farmer said after the markets closed on Friday that it projected U.S. 2015 corn production at 13.323 billion bushels, based on a yield of 164.3 bushels per acre.
The figures compare with the U.S. Agriculture Department’s latest forecast of 13.686 billion bushels on a yield of 168.8 bushels per acre.
Pro Farmer also forecast U.S. soybean production at 3.887 billion bushels with an average yield of 46.5 bushels per acre. Earlier this month, USDA pegged the soybean harvest at 3.916 billion bushels and yield at 46.9 bushels per acre.
Many traders had expected the results to show yield potential below recent forecasts by the U.S. government.
Wheat prices on Friday also eased after U.S. weekly exports spotlighted ample global supplies as big harvests in Europe and the Black Sea region flowed into the market.
“There simply aren’t any friends for U.S. wheat right now,” said Agrivisor LLC analyst Dale Durchholz.
Even the recent pressures on the U.S. dollar, which was down for the third straight day against a basket of currencies , couldn’t boost agricultural commodity pricing, Durchholz said. When supplies are tight and prices are high, grain prices tend to become stronger when the value of the dollar is down.
“But now, when prices are low and supplies are so high, the currency values can change and not make much difference,” he said. “Right now, it’s still relatively cheap in what you can buy.”
Chicago Board of Trade (CBOT) November soybeans, the most actively traded soybean contract, was down 17-3/4 cents, or 1.9 per cent, to $8.89-1/2 a bushel, just above a nearly six-year low of $8.88 (all figures US$). Prices were down 2.9 per cent for the week.
Worries about Chinese growth intensified after a survey showed the country’s factory sector shrank at its fastest rate in almost 6-1/2 years in August, triggering a further slide in equity and commodity markets.
The soybean market tends to be sensitive to macroeconomic sentiment about China as it dominates global imports of the oilseed.
CBOT December corn closed down 5-1/4 cents per bushel, or 1.4 per cent, at $3.77-1/4. Prices were up 0.4 per cent for the week.
CBOT September wheat dipped 6-3/4 cents per bushel, or 1.4 per cent, at $4.99-1/2. Prices were down 1.4 per cent for the week.
— P.J. Huffstutter reports on agriculture and ag markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.
