Corn futures dropped 1 percent, falling below $7 and hitting their lowest level in almost six months, as demand continued to weaken. Wheat also fell to its lowest level since early July as a major winter storm hit the US Plains states and provided some relief to key growing areas of the drought-stricken region. Year-end selling added further pressure to all three commodities as investors pulled money out of the markets before the holidays, a time when trading volume is traditionally the lightest of the year.
"It is just continued liquidation," said Jim Hemminger, senior risk manager with Top Third Ag Marketing. "It is sort of a market that is feeding on itself with selling pressure in a thin market." Chicago Board of Trade January soyabean futures closed down 28-1/4 cents at $14.08-3/4 a bushel. Prices bottomed out at $14.02-3/4 a bushel, their lowest level since November 21.
CBOT March corn was off 6-1/2 cents at $6.96-1/2 a bushel, the third straight day of declines for the front-month contract, which hit its lowest level since July 2. The front-month contract also dropped below key technical support at $6.97-3/8, which was the 50 percent Fibonacci retracement point from its summer rally to a record high of $8.43-3/4. CBOT March wheat was off 15-1/4 cents at $7.90-1/2 a bushel. Prices hit their lowest level since July 3.
Private exporters reported the cancellation of 540,000 tonnes of US soyabeans sold to China - the biggest cancellation by the world's top importer of the oilseed in at least 14 years - the US Agriculture Department said. Earlier this week, China scuttled plans to buy 300,000 tonnes of US soyabeans. USDA also said private exporters reported the cancellation of a separate 120,000-tonne deal, which traders said was likely destined for China.
China was likely cancelling US soyabeans it had purchased as insurance in the event of a poor crop in South America, said Garrett Toay, risk management consultant at Toay Commodities Futures Group in Des Moines, Iowa. "They could have overbooked here as protection," he said. "China is assuming there is nothing wrong with the Brazilian crop." Corn futures have fallen for 10 out of the last 11 sessions, dropping 8 percent during that period, due to eroding demand from overseas buyers and ethanol producers.