Grain, Soybean Futures Fall; Funds Extend Corn, Wheat Shorts

By Benjamin Parkin Features Dow Jones Newswires

Grain and soybean futures started the week lower, pressured by moves in other markets.

Continue Reading Below

Soybean contracts led losses, falling to the lowest close in over a month. January oilseed contracts at the Chicago Board of Trade dropped 1.3% to $9.74 1/4 a bushel.

The U.S. dollar rose, making agricultural exports more expensive for global buyers. At the same time, the currencies of the other major exporters weakened, exacerbating the disadvantage to U.S. producers.

Mixed crude-oil prices, which rose and fell during much of Monday's session, left speculative traders with few incentives to buy grain and soybean contracts or get out of short positions, said research firm AgResource Co.

A Commodity Futures Trading Commission report released Monday afternoon showed large speculative investors increased their already sizeable wagers on falling wheat and corn prices.

Money managers increased their net short position in the corn market to over 205,000 futures and options contracts as of Tuesday, with a 13% increase in their Chicago soft-red winter wheat net short position to over 125,000 contracts. Funds increased their net long in the soybean market, the CFTC said.

Continue Reading Below

The large net short positions in grain markets limited the potential for further losses, analysts said, increasing the likelihood of a snap higher if supply threats or demand boons prompted funds to get out of their positions.

For now, there were few such prospects on the horizon. The Commodity Weather Group said rain would spread across Brazil over the coming week, benefiting most of the country's corn and soybean crops. That diminished the likelihood that dryness in Brazil would cap production in their upcoming harvest, trimming global stockpiles and supporting prices in the process.

CBOT December corn futures fell 0.4% to $3.42 1/4 a bushel. December wheat slid 1.7% to $4.24 1/4 a bushel.

"Bottom line in the market is that the path of least resistance at the present time is down," said Karl Setzer, an analyst at MaxYield Cooperative.

Write to Benjamin Parkin at benjamin.parkin@wsj.com

(END) Dow Jones Newswires

November 13, 2017 16:24 ET (21:24 GMT)