GRAINS-U.S. corn faces biggest weekly loss in 3 years as weather improves
(Reuters) – SINGAPORE, June 24 Chicago corn futures were on track to post their biggest weekly loss in three years on Friday as improving U.S. crop weather prompted investors to liquidate long positions.
Soybeans were poised for a second week of decline, while wheat faced its third weekly fall amid plentiful world supplies.
The Chicago Board of Trade most-active corn contract has given up more than 11 percent this week, the most since June 2013, while soybeans have shed 4 percent, the biggest drop since August. Wheat has lost 6.5 percent in three weeks.
“Corn and soybeans have come down in recent days because of good rains across the Midwest,” a Singapore-based grains trader said. “It has been dry in wheat areas which is good for the winter crop harvest.”
Storms rolled through the U.S. corn belt this week, easing concerns about dryness in some areas. With the crop heading into its pollination phase, which typically occurs in July in the U.S. Midwest, weather remained the focus.
Commodity and financial markets are closely watching results from a British referendum on European Union membership for trading cues, although grains and oilseed prices are largely being driven by fundamentals.
Carnage came to world markets on Friday as early voting returns suggested Britain was on the brink of leaving the European Union, threatening the existent of the entire bloc and its single currency.
“Soybean futures are more vulnerable than corn to a potential setback driven by Brexit results because corn has already retreated more from a recent rally,” said Tom Grisafi, broker for Illinois-based Advance Trading.
“If something was to happen with the Brexit vote, it wouldn’t surprise me at all to see beans move one way or another and scare people.”
Commodity funds were net sellers of CBOT corn, soybean and wheat contracts on Thursday. Trade sources estimated that funds sold 13,000 corn contracts, 12,000 soybean contracts and 4,000 wheat contracts.
The soybean market faced additional pressure from improving supply outlook in Argentina.
Argentina increased its 2015-16 soybean crop estimate to 58 million tonnes from a previous forecast of 57.6 million, citing a faster-than-expected recovery of areas thought to have been lost to floods caused by unusually hard April rains.
“Very high yields continue to be seen, despite some excessive wetness, in Buenos Aires and La Pampa provinces, as well as in the parts of Cordoba and Santa Fe that were not affected by the floods,” the agriculture ministry said.
