Corn and soya drop

US corn shed over 2 percent of value on Thursday and soyabeans eased 1 percent as investors banked profits on a lack of fresh bullish news, analysts and traders said. "It can't keep going up forever. Eight dollar corn and $17 beans are pretty pricey, it got a little overdone to the upside," a Chicago Board of Trade grains trader said.
The worst drought in over a half century in the US crop belt boosted new-crop December corn to a record high of $8.49 nearly two weeks ago, but the feed grain is now 4 percent below that peak as the harvest draws near. November soyabeans reached a contract high of $17.44-3/4 per bushel in early trading, then began to slide on profit-taking. Spot soyabeans are now 3 percent below the record for CBOT soyabean futures of $17.77-3/4 per bushel set on July 20.
"I think the market needs more bullish input now on a steady basis to sustain gains. We would expect to chop around at these high prices," said Shawn McCambridge, senior grain analyst for Jefferies Bache. Chicago Board of Trade December corn was down 20 cents per bushel at $8.14-3/4, November soyabeans were down 12-3/4 cents at $17.15 and September wheat was down 22 at $8.74-1/2 a bushel.
It was the biggest one day drop percentage-wise for corn in a month and the most for soyabeans and wheat in nearly two weeks. The declines were notched despite dire production reports for corn and soyabeans from the annual Pro Farmer tour of Midwest crops. Analysts and traders said the low yield and production data had already been dialed into the market during its race to record highs.
Declining cash grain markets in the US interior also lent pressure to corn and soyabean futures. Wheat eased for the second day in a row after advancing for five consecutive sessions on concerns about drought-reduced wheat stocks in Russia and Ukraine. Soyabeans were underpinned by solid numbers in the US government's weekly export sales report on Thursday. Soyabean export sales last week totalled 718,700 tonnes, above the high end of estimates for 650,000 tonnes.
Traders have been expecting high soyabean prices to weaken export demand. While the drought has boosted corn and soyabean prices to record highs, the market is now focusing on demand factors for fresh guidance. An industry survey of US Midwest corn and soyabean fields this week confirmed fears that production potential has been sharply reduced by the drought.