(Reuters) – U.S. soybean futures fell on Wednesday after hitting a six-week high in the previous session on the back of strong demand led by China.
But soybeans moved in and out of positive territory as some market participants still expected continued imports by China to support prices.
Corn and wheat were hardly changed as the market sought new direction after recent price rallies following a major U.S. Department of Agriculture (USDA) report on Friday. The USDA had forecast a record U.S. corn crop but still below market expectations plus very robust soybean demand.
Chicago Board of Trade most-active January soybeans fell 0.1 percent to $13.13-1/4 a bushel by 1147 GMT, after having firmed 1 percent on Tuesday and touching a peak of $13.19-3/4 a bushel, the highest since Sept. 27.
“It is a little bit of profit-taking as we have seen a bounce in soybean prices which is a repeat of the situation of tight U.S. balance sheet and strong demand,” said Brett Cooper, senior markets manager at INTL FCStone Australia.
Front month December corn rose 0.1 percent to $4.33 a bushel on some bargain-hunting after falling on Tuesday. December wheat was unchanged at $6.45-1/4 a bushel.
On Tuesday, soybeans drew support from the U.S. Department of Agriculture reporting export inspections of U.S. soybeans at 79.697 million bushels. Nearly 60 million tonnes were earmarked for China, the world’s biggest soy consumer.
Traders said they were still expecting export support for soybeans in coming days.
“Corn and wheat are drifting somewhat today, lacking direction as people still mull the impact of the USDA report on Friday,” said Saxo Bank analyst Ole Hansen. “The corn rally this week was nowhere near price rises seen after surprises in some previous USDA reports. Some corn investors are happy to play for the short side, expecting falling prices as the large U.S. crop comes in.”
The corn market, which climbed to a two-week high on Tuesday on lower-than-expected stocks estimated by the USDA, could face pressure as record crop replenishes supplies.
U.S. farmers are nearly finishing their corn and soybean harvest, which observers stress will be huge despite lower-than-anticipated forecasts by the USDA report on Friday.
“Corn was extremely extended to the short side in advance of the Friday USDA report with the market expecting a larger U.S. harvest than the USDA eventually predicted,” Hansen said.
“Corn was supported by considerable short covering rally after the report. But the USDA report seems to have failed to create a major change of heart among the shorts. Quite a few short holders seem fairly happy to stay with their positions, with the large U.S. crop seen as likely to weaken prices.”
“Wheat is lacking impetus today following corn with fresh news not enough to inspire the market.”
