Chicago | Reuters — Chicago Board of Trade soybean futures dropped to their lowest level in more than two years on Thursday and corn futures set a three-year low before the markets turned higher on short covering and technical buying, analysts said.
Expectations for adequate global supplies and improved crop weather in Brazil, the world’s top soybean exporter, continued to hang over the markets.
Soy and corn futures had become oversold following recent losses, though, said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage.
“The soybean and meal markets are the most oversold they have been in eight months,” he said.
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U.S. grains: Corn sets contract lows on expectations for big US crop
Chicago Board of Trade corn futures set contract lows and soybean futures sagged on Friday on expectations that beneficial weather for U.S. crops will lead to bumper harvests, analysts said.
Most-active CBOT soybean futures Sv1 ended up 7-3/4 cents at $12.13-1/2 a bushel after sinking earlier to $12.01, the lowest level since November 2021. March soymeal SMH24 closed $2.60 higher at $361.30 per short ton.
Corn futures Cv1 rose 1-3/4 cents to $4.44 per bushel after hitting $4.36-3/4, the lowest price since December 2020.
Traders are trying to determine how much bearish news is dialed in to the soy market after recent declines, said Don Roose, president of brokerage U.S. Commodities.
“It’s more of an exhaustive rally,” Roose said.
“It’s a market that you reach a point of: What is fair market value? You get negative news and you don’t go anywhere because its already in the market.”
Beneficial rains have eased concerns about crop damage in Brazil from drought. Consultancy Agroconsult still lowered its forecast for Brazil’s soybean harvest to 153.8 million metric tons from 161.6 million in November.
A decline in Brazil’s soybean production could be offset by an expected bumper harvest in Argentina, analysts said.
“There are some concerns for the Brazilian crop, but any losses seem like they will be recouped by a rebounding Argentinian crop,” said Andrew Whitelaw, analyst with Episode 3 in Canberra.
CBOT wheat Wv1 settled up 3 cents at $5.85-1/2 a bushel after stumbling earlier to its lowest level since Nov. 29. K.C. KWH24 and MGEX wheat MWEH24 rallied from contract lows.
On Friday, traders will review weekly U.S. grain and soy export sales data.
–Additional reporting for Reuters by Gus Trompiz in Paris and Peter Hobson in Canberra.
