PARIS/SINGAPORE, Jan 14 (Reuters) – Chicago corn futures edged lower on Tuesday to halt a two-day rally sparked by lower-than-expected U.S. government supply estimates as attention turned back to a record U.S. crop
U.S. wheat was little changed, hovering within sight of a 3-1/2 year low, as an export-fuelled rebound on Monday stalled in the face of plentiful global supplies. Soybeans rose slightly to set a new two-week high, bolstered by strong Chinese buying
The U.S. Department of Agriculture (USDA) stirred up the corn market by unexpectedly cutting its yield estimate for the 2013 U.S. harvest, while also putting ending stocks below the consensus of trade estimates
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Feed Grains Weekly: Price likely to keep stepping back
As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
But after a 5 percent surge in corn futures on Friday and a slight rise on Monday, the market was putting the USDA numbers in the context of a record-large U.S. crop and hefty world supply, analysts said
“The bigger picture of a large year-on-year increase in U.S. corn supplies still remains intact, so it is difficult to get overly excited about corn prices in the medium term,” said Luke Mathews, commodities strategist at Commonwealth Bank of Australia
“The market will still look at testing $4 a bushel at some stage over the next six months or so.”
Spot corn futures hit its lowest level in more than three years at $4.06-1/4 on Friday before the USDA estimates as traders anticipated a upward revision to U.S. supply
At 1246 GMT on Tuesday, Chicago Board of Trade March corn was down 0.4 percent at $4.32-3/4 a bushel
Analysts stressed that corn prices remained attractive versus soybeans, which could mean more big plantings this year
“In our view, reality is that stocks are still very comfortable and any rally through the critical February-average period (for prices) would lead the U.S. farmer to plant another enormous corn crop in 2014,” Macquarie analysts said in a note
Front-month March wheat was unchanged on the day at $5.73 a bushel, not far from a three-and-half year low of $5.60-1/2 a bushel hit on Friday
A first purchase of U.S. wheat in 2013/14 by Egypt’s state buyer over the weekend helped prices bounce off a 3-1/2 low hit on Friday when the USDA put U.S. and global stocks above expectations
CBOT March soybeans was up 0.3 percent at $12.98 a bushel, adding to a sharp rise on Monday. It earlier hit a two-week high of $12.99 before coming up against resistance at the $13 threshold
The USDA said on Monday that U.S. export inspections for soybeans were 59.381 million bushels, beating forecasts for 45 million to 50 million
It also said that private exporters reported the sale of 140,000 tonnes of U.S. soybeans to unknown destinations.
