US soyabean futures fell nearly 2 percent to a 3-1/2-month low on Monday breaking key technical support at the $15 per bushel mark in a sell-off on anticipation of a bumper crop in South America and improving harvest yields in the United States.
Soyabeans are down 17 percent, or $3, from the record high $17.94-3/4 set on September 4 on fund buying during the worst drought in half a century that led to fears of a shortfall of soyabean supplies. CBOT December corn was down 16 at $7.36-3/4 per bushel. Wheat dropped to a two-month low on waning US wheat exports but the winter wheat traded on the Chicago Board of Trade fell over twice as much as the high protein spring wheat traded on the Minneapolis Grain Exchange. CBOT December wheat was down 8-1/2 at $8.48 per bushel while Minneapolis Grain Exchange December wheat was down 3-1/4 at $9.21.
"Funds were big buyers on the way up and they're sellers now, I don't see any support until we get down to $14.75, the bottom of the gap ... basis November," said Sterling Smith, futures specialist for Citigroup. That chart gap was established from July 3 to July 5. "It's a combination of Brazilian weather, they had rain where they needed it in the north, and there is more liquidation," said Brian Rydlund, market analyst for Minnesota-based firm Country Hedging.
Chicago Board of Trade November soyabean futures were down 29 cents per bushel at 14.93-1/2. Corn fell over 2 percent, declining for the second day in a row on spillover selling from the plunging soyabean market and talk that the United States was importing corn from South America, traders said.
Corn is now down about 5 percent from the one-month peak of $7.73 per bushel hit last Thursday following the release of a US government report that showed US corn ending supplies by the end of next summer at a 17-year low and below analyst estimates. Kent Beadle, also a market analyst for Country Hedging said, "after only two sessions we're back to where we were in corn before the report. Money is leaving commodities because of the macro issues in Europe and China."
Crude oil was down sharply early on Monday then turned nearly flat, the dollar turned firm and the euro swung between gains and losses as investors awaited clarity on when Spain may request a bailout. The global economic uncertainty was driving investors away from commodities such as grains in a risk-off day. "That and from falling soyabeans. They're hell bent on driving beans into the gap from $14.74-3/4 to $14.93 that was set in early July," Beadle said.