Corn and soybean futures turned lower as rainfall in Argentina eased concerns about the country's crops.
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Above-expectation rainfall over the weekend reduced dry patches to around 20% of Argentine corn and soybean acreage, said the Commodity Weather Group in a note to clients. That's down from as much as half in recent weeks. Rain later this week could reduce those areas further ahead of another dry turn in six to 10 days time.
The weather developments increased the selling pressure in corn and oilseed markets. Traders are banking on production losses in Argentina as a lever to limit global oversupply.
January-dated soybean futures fell 0.6% to $9.61 1/2 a bushel at the Chicago Board of Trade, the lowest close in over a month. CBOT March corn futures fell 0.1% to $3.47 a bushel.
Traders shrugged off signs of steady demand for U.S. crops. The U.S. Department of Agriculture said that private exporters sold 396,000 metric tons of soybeans to China for 2017-18, along with 168,000 tons of grain sorghum.
With the U.S. exports of soybeans and other crops behind their projected pace for this season, analysts said individual sales are unlikely to spark buying interest among futures traders.
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Wheat futures held onto overnight gains to close higher, however. CBOT March wheat futures rose 0.5% to $4.20 1/2 a bushel, the highest close in three weeks.
An upcoming cold snap in the Plains sparked some concern about the condition of the wheat crop, analysts said.
"Colder temperatures will push wheat back into dormancy. Winterkill threats will increase across the north central Plains," said MDA Weather Services in a note, speaking of the six-to-10-day forecast.
Regulatory data released late last week showed funds betting in larger numbers than ever before that grain prices would fall, according to AgResource Co.
Money managers held a net short position of 157,652 futures and options as of Tuesday, according to the Commodity Futures Trading Commission, extending their pessimistic bets by a third. Funds also increased their net short in the corn market by a quarter to 197,192 contracts.
Analysts said that created potential for a bounce if money managers start to unwind those positions.
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(END) Dow Jones Newswires
December 18, 2017 15:55 ET (20:55 GMT)