Corn, Soybeans Shed Value
U.S. corn shed over 2 percent of value on Thursday and soybeans eased 1 percent as investors banked profits on a lack of fresh bullish news, analysts and traders said.
“It can't keep going up forever. Eight dollar corn and $17 beans are pretty pricey, it got a little overdone to the upside," a Chicago Board of Trade grains trader said.
The worst drought in over a half century in the U.S. crop belt boosted new-crop December corn to a record high of $8.49 nearly two weeks ago, but the feed grain is now 4 percent below that peak as the harvest draws near.
November soybeans reached a contract high of $17.44-3/4 per bushel in early trading, then began to slide on profit-taking.
Spot soybeans are now 3 percent below the record for CBOT soybean futures of $17.77-3/4 per bushel set on July 20.
“I think the market needs more bullish input now on a steady basis to sustain gains. We would expect to chop around at these high prices," said Shawn McCambridge, senior grain analyst for Jefferies Bache.
"Everybody got long and now we wait for fresh news that might move it one way or another."
Chicago Board of Trade December corn was down 20 cents per bushel at $8.14-3/4, November soybeans were down 12-3/4 cents at $17.15 and September wheat was down 22 at $8.74-1/2 a bushel.
It was the biggest one day drop percentage-wise for corn in a month and the most for soybeans and wheat in nearly two weeks.
The declines were notched despite dire production reports for corn and soybeans from the annual Pro Farmer tour of Midwest crops. Analysts and traders said the low yield and production data had already been dialed into the market during its race to record highs.
Declining cash grain markets in the U.S. interior also lent pressure to corn and soybean futures.
Wheat eased for the second day in a row after advancing for five consecutive sessions on concerns about drought-reduced wheat stocks in Russia and Ukraine.
Soybeans were underpinned by solid numbers in the U.S. government's weekly export sales report on Thursday. Soybean export sales last week totaled 718,700 tonnes, above the high end of estimates for 650,000 tonnes.
Traders have been expecting high soybean prices to weaken export demand. While the drought has boosted corn and soybean prices to record highs, the market is now focusing on demand factors for fresh guidance.
An industry survey of U.S. Midwest corn and soybean fields this week confirmed fears that production potential has been sharply reduced by the drought.
Corn yields in Illinois were pegged at their lowest levels in 17 years by the Pro Farmer Midwest Crop Tour.
"The crop tour results are factored in and the market is now looking for the next factor," McCambridge said.
Hopes that scattered rains would improve the outlook for soybeans have been dashed by the latest crop data.
"The market has largely factored in the damage that has been done to the corn crop, which obviously was harvested a bit earlier than the soybean crop, so we are seeing downgrades to that soybean crop pushing the oilseed higher," said Graydon Chong, a senior grains and oilseeds analyst at Rabobank.
The crop tour estimated soybean pod counts were about 21 percent below average in Illinois, the No. 2 growing state for the crop, with the poorest counts in the central parts of the state most affected by the drought.
"No matter where we went, the beans disappointed. The pods aren't there, and the beans just aren't in the pods," said Peter Meyer, a crop scout and director of agriculture analytics at PIRA Energy.