(Agriculture.com) – On Monday, the CME Group grains futures ended mixed, with corn and wheat up slightly and soybeans continuing lower.
At the close, the Sept. corn futures settled 3 1/2 cents higher at $3.68 3/4; Dec corn futures closed 3 1/4 cents higher at $3.80 1/2.
Sept. soybean futures finished 12 1/2 cents lower at $8.92 3/4. Nov. soybean futures ended 15 1/2 cents lower at $8.74.
Sept. wheat futures settled 3 3/4 cents higher at $5.03 1/4.
September soymeal futures closed $0.50 per short ton lower at $326.40. September soyoil futures closed $0.81 lower at $26.55.
In the outside markets, the Brent Crude oil market is $1.92 lower per barrel at $43.54. The Dow has recovered from a drop of more than 1,000 points at the start of trading but ended down by more than 550 points. The U.S. dollar is lower.
China’s continuing struggles with a crashing stock market were bound to be bearish for soybeans.
A more significant factor is that China often buys U.S. soybeans when prices fall. That wasn’t happening Monday, said Don Roose of U.S. Commodities in West Des Moines, Iowa.
“China is the big buyer in the world market on soybeans, and they haven’t really shown up on this new break in the market to be big buyers,” he told Agriculture.com.
The market also believes that the U.S. has lost about 370 million bushels in soybean sales to China this summer from competition from South America, mainly Brazil but also Argentina.
A Pro Farmer crop tour that last Friday estimated higher U.S. 2016 soybean yields than in USDA’s August crop report was already bearish even before the day’s trading began at the CME, Roose said.
The crop tour has a slightly lower corn yield estimate than USDA and domestic corn users for ethanol and feed have been scale down buyers when prices fall. Corn prices were up a bit today.
“The funds continue to have a long position in corn and continue to want to hold it,” Roose said.
With the dollar off 2% at one point during the day Monday, that was seen as helpful for demand for U.S. wheat and even a little for corn, Roose added.
Fund positions in an overall commodities market that is bearish due to China’s weakening economy are another negative factor on grains, according to Commodity Specialist Helen Pound of Wedbush Securities, Inc. in Minneapolis.
“Some traders may think that grain futures prices are close to being technically oversold and are becoming a bargain hunting value,” she told clients earlier Monday. “On the other hand, the huge moves in currency and raw material values will force many ‘investors’ to raise cash for margin calls, and this may encourage potential buyers to step aside until markets calm down. All in all, low interest rate-fueled leverage may have hurt ‘investors’ significantly, and it may take some time before significant bargain hunting emerges. The cheaper Russian ruble and Brazilian real encourage world cash grain prices to work lower.”
