US corn futures slipped almost one percent on Thursday, easing from a six-week peak on profit-taking after the market had moved into overbought technical levels during a lively weather rally. Soyabeans and wheat also slipped from over six-week highs on signs the market had become overheated or technically overbought during a bout of year-end short-covering through mid-week.
Concerns about declining corn and soyabean production in South America because of dryness and drought combined with hot weather in Argentina had been boosting each market throughout the last half of December. "We already have a South American premium in the market," a trader said.
"We're looking at a long weekend with no change in weather in South America. We know what the weather is there now and we have to wait and see if it rains. If it doesn't rain, we'll go up again," said Joe Bedore, Chicago Board of Trade (CBOT) floor manager for trade house Intl FC Stone.
Markets will be closed from Saturday through Monday in an exchange-declared holiday trading lull. CBOT corn for March delivery was down 4-1/2 cents at $6.38, January soya was down 10-3/4 at $11.87-1/2 and March delivery wheat was down 6 cents at $6.45-1/4. Analysts in South America this week said Argentina's corn crop will be smaller than expected earlier but still a record.
Widely followed crop scout Michael Cordonnier this week began trimming his crop estimates and Commodity Weather Group issued a special report indicating Argentina's crop at 10 percent below the trendline yield. The US Department of Agriculture (USDA) in early December forecast Argentina's corn crop at 29.0 million tonnes. USDA will issue updated crop data on January 12.
Argentina is the world's second-largest exporter of corn after the United States, the third-largest soya exporter and the biggest exporter of soyaoil and soyameal. Dry weather is a mounting problem in the key South American producer, and weather in Brazil, the world's second-largest soya exporter, also is less than stellar. Limited relief from the dryness is expected for at least 10 days in Argentina and moisture deficits are persisting in over two-thirds of the corn belt.
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