US soyabean futures fell on Monday for the first time in six sessions and corn dropped after two sessions of gains on profit taking and as traders took positions ahead of a government crop report due later this week. Wheat futures edged higher on technical buying and short covering, although gains were limited by weak US export demand and improved crop weather in key production areas around the world. A firm US dollar and sharply lower crude oil, which slumped close to a seven-year low on Monday, weighed down grains markets in general.
Soyabeans touched a six-week high in overnight trading before retreating below a key support level around $9 a bushel. Corn topped Friday's one-month peak before turning lower. "We rallied up last week on some moderately supportive news, and now we're seeing a little profit taking here ahead of Wednesday's USDA report," said Rich Nelson, chief strategist with Allendale Inc.
"We need some much stronger fundamental information to justify this (soyabean) market holding over $9," he said. The US Department of Agriculture will release its monthly supply and demand report on Wednesday. The agency is expected to cut its soya supply forecast and boost its corn and wheat supply outlook, a Reuters poll of analysts showed. Chicago Board of Trade January soyabeans fell 10-1/2 cents, or 1.2 percent, to $8.95-1/2 a bushel by 11:27 am CST (1727 GMT) while CBOT March corn dropped 7 cents, or 1.8 percent, to $3.74-1/2 a bushel. Both markets posted their steepest percentage declines in nearly a month.
Corn traders shrugged off a USDA confirmation on Monday of 115,000 tonnes in export sales to Mexico as sales overall remain well behind normal. Soyabean oil traders are monitoring proposed legislation in Congress to change the $1-a-gallon biodiesel blenders' tax credit to a producer credit, which should boost biodiesel demand. CBOT March wheat rose 1-1/4 cents, or 0.3 percent, to $4.85-3/4 a bushel in a third straight session of gains.
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