US grains fell on Wednesday as investors cashed in profits after a blistering rally, but losses narrowed at the close by more than half as end users purchased grain and as updated weather outlooks scaled back rain forecasts for the Midwest. Analysts said "buying on the breaks" signalled that rallies in corn and soyabeans still have legs. Corn is up about 50 percent since mid-June with soya up 20 percent because of severe drought damage to developing crops.
"The rains are too little too late. Will they be helpful, yes. But they will not help much in increasing yield," said Mark Kinoff, president of Ceres Hedge in Chicago. "For a lot of people who had not bought what they should have bought, it was a gift for them today," he said of the early sharp declines in corn and soyabean futures. After the market closed, brokerage INTL FC Stone issued its estimate of the US corn yield of 124.3 bushels per acre and production at 11.043 billion bushels. It pegged the soyabean yield at 36.2 bushels per acre, and the crop at 2.730 billion.
The forecasts were much smaller than the US Department of Agriculture's corn yield estimate of 146 bushels per acre and production at 12.97 billion. Its soyabean yield was an estimated 40.5 bushels per acre, and output of 3.050 billion bushels. A weekly Reuters poll of analysts on Tuesday showed a further decline in yields and production. Spot August soyabeans tumbled as much as 4 percent before closing 2 percent lower at $16.82-1/4 per bushel as trader exited long positions before the contract's expiry on Aug 14, but traded volume was relatively light.
Benchmark November soyabeans fell as much as 2.6 percent before ending 0.7 percent lower at $16.29 a bushel. CBOT new-crop December corn ended 0.6 percent lower at $8.00-1/2 a bushel, rebounding from a session low $7.82. September wheat fell 2.4 percent to $8.67-1/4 a bushel, adding to its Tuesday's decline of 2.9 percent. "There's profit taking," said grains analyst Charlie Sernatinger of ABN AMRO in Chicago, adding that there was also some chart-based technical selling earlier in the session. He also said there were anecdotal accounts of high corn yields in the South as the harvest got rolling, but farmers were still weeks away from combining in the Midwest, which accounts for 75 percent of the country's corn and soya production.