Grain and soybean futures fell on Thursday as falling oil prices dragged the agricultural commodities lower.
Crude oil prices sunk below $50 a barrel on Thursday morning, falling as much as 5%, after the Organization of the Petroleum Exporting Countries announced that it would continue withholding supply into March 2018, short of what many had expected.
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"OPEC hoped to energize the crude oil market with its decision, but thus far hedge fund managers appear unimpressed," said Arlan Suderman, chief commodities economist at brokerage INTL FCStone in Kansas City, Mo.
That weighed on grain and oilseed prices, which had inched higher overnight but reversed course to close lower. Persistent concerns about planting delays and replanting haven't been enough to build risk premium into futures, with traders confident that ample stockpiles will limit the consequences of any harvest trouble.
"There's too much corn and beans and wheat in the world," said Tomm Pfitzenmaier, founding partner at Summit Commodity Brokerage in Des Moines, Iowa. Rallies are going to be "blunted" as a result, he said.
Soybean futures for July delivery fell 0.9% to $9.39 1/2 a bushel at the Chicago Board of Trade, the lowest close since mid-April and just shy of a year's low.
Mixed signs of export demand also pressured futures. Weekly export sales of corn reported by the U.S. Department of Agriculture fell short of expectations, at 457,700 metric tons for this year and the next. That was below the low end of analyst estimates, while export sales for wheat and soybeans were within the range of estimates.
CBOT July corn futures fell 0.5% to $3.69 1/4 a bushel. Wheat fell 0.4% to $4.30 3/4 a bushel.
"Even some of the most faithful and ardent commodity bull advocates have decided to cross over to the dark side," said Dan Hueber, manager of advisory firm The Hueber Report in Sycamore, Ill.
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(END) Dow Jones Newswires
May 25, 2017 15:43 ET (19:43 GMT)