Wheat, corn, and soy prices decline due to technical selling
Chicago soybean futures edged lower on technical selling on Wednesday.
As of 05:06 GMT, the most active soybean contract on the Chicago Board of Trade fell 0.1% to $15.37-1/4 a bushel. Corn fell 0.4% to $6.76-3/4 a bushel, while wheat was slightly lower at $7.61.
With China reopening after the Lunar New Year break, the demand outlook for soybeans has brightened, according to a note from commodities research firm Hightower.
Bearish technical activity holds back corn prices. Moreover, traders are unsure if the predicted rain for Argentina next week will be sufficient to prevent stressful conditions for the crops, according to the report.
Wheat reached an almost four-week high earlier this week, while soybeans and corn reached their best levels in over two weeks. On Tuesday, commodity funds were net sellers of maize and soy meal futures contracts and net buys of CBOT soybean, wheat, and soy oil futures contracts, according to traders.
Investors are eagerly expecting the U.S. Federal Reserve Open Market Committee’s (FOMC) decision on interest rates, which is scheduled to be announced at 1900 GMT. Analysts anticipate a 25 basis-point increase.
On low demand, corn and soy barge base is stable
Due to a lack of demand and flat-to declining freight costs, basis bids for maize and soybeans carried by barge to the U.S. Gulf Coast remained largely stable on Tuesday, according to dealers.
In order to counteract weak Gulf export demand, slow farmer sales reduced the flow of maize and soybeans into the export market pipeline.
The Illinois River experienced a substantial ice buildup due to cold weather in the northern Midwest, which hindered river traffic. Shippers in the busy Port of St. Louis were also encouraged by low water levels to lower barge drafts, which reduced the amount of grain that could be loaded per barge.
In China, demand for imported corn and soybeans increased this week because of last week’s market closures for the Lunar New Year. However, a trader claimed that Chinese customers were hoping to purchase Brazilian new-crop soybeans at a lower price or American soy from the Pacific Northwest, which would arrive sooner than cargoes from the Gulf.
Barges loaded with CIF Gulf soybeans in January were offered at 115 cents over March (SH3) futures on the Chicago Board of Trade (CBOT), while those loaded in February were offered at 107 cents above futures, both unchanged.
While premiums for March shipments remained around 120 cents over futures, FOB basis bids for February soybean shipments remained stable at roughly 130 cents over March futures. Basis offers for January-loaded CIF corn barges remained constant at 87 cents over CBOT March corn (CH3) futures.
March FOB offers remained unchanged at 99 cents above futures, while FOB offers for February corn shipments dropped 5 cents to roughly 90 cents above CBOT March futures.
