Corn and soybeans hit new multi-year lows

Chicago corn prices fell to a new three-year low on Wednesday as weather charts showed a hot and dry period in Argentina will be replaced by heavy rain in the coming days, traders said.

Soybean futures also fell – with the most active soybean contract on a continuous chart touching its lowest price since Dec. 15, 2020 – as forecast rains in Brazil’s main growing regions heightened expectations of large supplies from South America.

The market moves underscore that market participants are shifting their focus back to forecasts of a glut in grain and oilseed production this year, said Karl Setzer, co-founder of Consus Ag Consulting.

“Right now, we don’t have a market with poor demand,” Setzer said. “We have a supply problem. We are overproducing what the world needs,” Reuters reports.

Those concerns about supply and demand also caused funds and other market participants to spend the day adjusting their positions ahead of Thursday’s crop reports.

The slew of data will include updates from Brazil’s Conab on official estimates of the country’s production, Statistics Canada’s estimates of the country’s grain stocks, and the USDA’s monthly U.S. and global supply and demand forecasts.

Setzer said traders will be especially watching Conab’s estimates after USDA reported better-than-expected harvests in Brazil last month, as well as higher yields and production levels of the recently harvested U.S. crop.

“Conab tends to lag behind USDA in production,” Setzer said, noting that if Conab’s numbers are relatively high, “that means USDA’s numbers are probably pretty close.”

The most-active Chicago Board of Trade (CBOT) corn contract fell 4-1/2 cents to $4.34-1/4 bushels. CBOT soybean quotes closed down 10.5 cents to $11.89 a bushel. CBOT wheat rose 7 cents to $6.02 a bushel.

Tags: soybean, corn, prices