Soya and corn decline

US soyabeans and corn fell on Thursday as the brisk pace of the domestic harvest and global economic worries dampened investor sentiment after drought lifted prices to record highs this summer. The lower prices triggered further selling based on technical indicators, taking soyabeans down 3 percent to a six-week low and knocking corn down 1.4 percent. Wheat followed them lower, but underpinning support from dryness concerns kept its losses modest.
The fall halted a 2 percent rebound in grains seen on Wednesday, when soyabeans drew bargain buying after enduring their steepest two-day slide in seven weeks in a burst of liquidation by funds. Chicago Board of Trade November soyabeans lost 3 percent, or 50-3/4 cents, settling at $16.18-3/4 a bushel. Traders said the drop triggered orders to sell at $16.30-1/2.
China, which buys about 60 percent of globally traded soyabeans, will carry on selling soyabean reserves well into 2013 to contain food inflation and tight global supply, traders said. China imported 4.42 million tonnes of soyabeans in August, the lowest monthly level in six months, as record-high prices and reduced world supply cut demand. CBOT December corn fell 1.4 percent, or 10-1/2 cents, to $7.46 a bushel, matching Monday's low at $7.39, which was the weakest price in more than two months.
CBOT December wheat eased 0.2 percent, or 2 cents, to $8.79-1/2. The winter wheat crop in the southern US Plains needs rain to establish itself and conditions are dry in Australian wheat-producing areas, said Dan Manternach, ag services director for Doane Advisory Services. A rapid start to the US soyabean harvest and reports of better-than-expected yields weighed on markets, even though analysts believe US and global supply will remain extremely tight after the worst drought in the United States in half a century slashed yield potential.
"We've got kind of a perfect storm right now in the market," said Karl Setzer, market analyst at MaxYield Co-operative. "You've got funds holding long positions and taking some profit, we've got a breakdown in the technicals and we really don't have any fresh, new fundamental support." Occasional light rain showers in the Midwest will cause only minor slowdowns in the corn and soyabean harvest that is off to a record-fast start this year, an agricultural meteorologist said on Thursday.