Grain and soybean futures turned lower on Friday as the prospect of growing supplies stymied buying interest.
Rain in the Midwest in the coming days should slow the speed at which farmers can harvest their corn and soybean crops, though analysts expect them to soon resume a brisk pace. Meanwhile, traders are less concerned about dry conditions in northern Brazil--which initially hampered soybean planting--with wetter forecasts in the weeks to come.
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"The grain and oilseed sector lacks any real fundamental driver to push prices higher right now," said Arlan Suderman, chief commodities economist at INTL FCStone Inc.
Traders are betting that the continued flow of newly harvested crops out of the Midwest and South American planting progress will add to already ample global supplies. That should limit an appetite for buying.
Mr. Suderman said any supply threats could quickly change that outlook. A 5% decline in Midwestern corn or soybean yields next year from recent trend lines could lead to tighter supplies of the crops and spark rallies, though no threats currently appear on the horizon.
Corn and wheat futures in particular fell out of recent trading ranges that had limited losses. December corn futures fell 1.3% to $3.44 1/2 a bushel at the Chicago Board of Trade. December wheat contracts slid 1.6% to $4.26 a bushel. Both contracts closed at the lowest point since mid-September.
CBOT November soybean futures fell 0.8% to $9.78 3/4 a bushel, though analysts said hedge fund interest in that market capped losses. Better demand prospects for oilseed have attracted funds, they say, with a stream of sales to China supporting prices.
A higher U.S. dollar intensified the selling pressure, making American crops more expensive for global buyers. The WSJ Dollar Index, which measures the greenback against a basket of currencies, rose 0.6% to 87.
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(END) Dow Jones Newswires
October 20, 2017 15:22 ET (19:22 GMT)