CHICAGO, Dec 28 (Reuters) – U.S. corn, wheat and soybean futures fell on Wednesday in technically driven trade as investors squared positions toward the end of the year and the dollar firmed, analysts said.
Additional pressure stemmed from easing concerns about crop weather in South America.
As of 12:38 p.m. CST (1838 GMT), Chicago Board of Trade March corn futures were down 6-1/2 cents at $3.48-1/2 per bushel. March wheat fell 5-1/2 cents to $4.04 a bushel and March soybeans slid 7-3/4 cents to $10.16-1/2.
All three markets retreated after rising a day earlier due in part to worries about dry conditions stressing corn and soybeans in portions of Argentina and northern Brazil.
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“Today some of the concern has moderated on the weather; being a little more realistic assessment in terms of conditions and production potential,” said Terry Linn, an analyst with Linn & Associates.
A typical drop in trader participation between the Christmas and New Year’s Day holidays was likely contributing to gyrations in grain prices this week, Linn and others said.
“We are in the final three trading sessions of the year,” Linn said. “That leads to some exaggerated moves in the markets, in both directions.”
A stronger dollar added to bearish sentiment, theoretically making U.S. grains less attractive to holders of other currencies. The dollar index rose on concerns over next year’s Brexit negotiations and expectations of higher U.S. economic growth.
“The U.S. dollar shooting up is compounding things,” said Terry Reilly, grains analyst with Futures International.
Wheat fell after climbing to a one-week high a day earlier.
“On wheat, there are also no major factors visible today that would sustain the large upward movement on Tuesday, which was partly caused by fund money flows,” said Matt Ammermann, commodity risk manager at INTL FCStone.
“However, the short-covering rally in wheat seen on Tuesday could still continue with some more follow-through strength possible for a couple of days.”
THE ICE Futures Canada canola market recorded losses on Wednesday, in sympathy with the US soy market.
Canola was “bouncing off the lows” for much of the morning according to a trader in Winnipeg. He noted funds were active sellers.
The Canadian dollar was slightly higher relative to its US counterpart, which made canola less desirable on the international market.
On the other side, strength in Malaysian palm oil lent some support to prices.
Canola’s most-active March contract received technical support at the C$508 per tonne level.
About 36,953 canola contracts traded on Wednesday which compares with Friday when 23,240 contracts changed hands.
SOYBEAN futures at the Chicago Board of Trade closed five to eight cents per bushel weaker on Wednesday, as competing oilseeds from South America are expected to move into markets in the next couple months.
US farmers have been selling soybeans on rallies, market watchers say, and yesterday’s gains may cause an influx of product, which is bearish.
Chart-based trends look mixed to lower, analysts say, which added to the downside, and could pressure the market in coming sessions.
