US corn futures fell on Tuesday amid slumping demand for US exports, and wheat also weakened to extend a losing streak on technical selling. Yet soyabean futures closed higher, after trading in negative territory for much of the day on improving weather in key growing areas of Brazil. The soya market reversed late in the session due to technical buying, traders said.
"Brazilian weather is about as close to perfect as you are going to get," said Sterling Smith, futures specialist for Citigroup in Chicago. "That is taking a little bit of risk premium out of the market." In Brazil, some much-needed dry weather was expected through Thursday, giving farmers time to plant corn and soyabeans. The forecast calls for storms to bring 1/2 inch to 1 inch this Friday and Saturday, with intermittent scattered showers expected for next week, said John Dee, meteorologist for Global Weather Monitoring.
US wheat futures, have fallen for four days in a row and the benchmark Chicago Board of Trade benchmark soft red winter wheat January contract has fallen 3.7 percent over that time. Traders said the soyabean market found support at its 20-day moving average of $14.36-3/4. Prices briefly broached that key technical support level but a round of bargain buying quickly showed up to push prices higher.
CBOT January soyabeans finished up 1-3/4 cents at $14.55-1/2 a bushel. CBOT March corn was 2-3/4 cents lower at $7.52 a bushel and CBOT March wheat dropped 4-1/4 cents to $8.56-1/2 a bushel. Wheat's failure to rise above its 50-day moving average following the Egypt deal spurred the technical sales earlier this week. The improving weather in South America threatens to further erode demand for US corn and soyabeans on the export market, curbing the late beans bounce.
Private analytics firm Informa Economics raised its forecast of Brazil's 2012/13 soyabean crop to 81.4 million tonnes from 81.25. Informa did reduce its expectations for Brazil's corn crop by 600,000 tonnes and cut its estimate for Argentine soya and corn production. Taiwan's Maize Industry Procurement Association, formerly known as Taiwan's Members Feed Industry Group, purchased 60,000 tonnes of corn to be sourced from Brazil in a deal late last week, European traders said on Tuesday. Poor soya crushing margins in China raised the prospect of a boost to stocks of the oilseed in the United States as the world's top buyer cuts back its purchases. Australia lowered its forecast for wheat production this year, the cuts were already factored into the market, traders said.
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