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Corn futures deflate after suspected farmer-selling

01/14/2014 @ 2:59pm

Corn futures fell for the first time in three sessions on speculation that farmers have increased selling after a 5.5% price spike in the prior two sessions. Soybeans and wheat gained, reversing early losses.

Corn prices surged in the two sessions before today after the U.S. Department of Agriculture unexpectedly cut its estimate for domestic production in a report on Friday. Growers last fall harvested 13.925 billion bushels of corn, less than the 13.989 billion forecast in December. As prices rise, farmers may be more willing to sell grain they've stored, anticipating higher prices, analysts said.

"The last couple of days we saw some pickup in cash corn sales," said Mike Zuzolo, the president at Global Commodity Analytics and Investments in Atchison, Kan. Growers are moving their corn out of on-farm storage after weather prohibited travel last week, "and sales after we had that [price] jump last Friday taken away some desire to be long corn."

Corn futures for March delivery fell 3 cents, or 0.7%, to $4.31 1/2 a bushel on the Chicago Board of Trade.

Soybeans gained as dry weather in parts of Argentina may stunt plant growth. Still, ample rain is expected to fall in Brazil, the world's biggest exporter of the oilseeds, which will cap prices, analysts said.

Soybeans also rose on signs of strong demand for inventories from the U.S., the world's second-biggest exporter of the oilseeds. The USDA inspected 59.381 million bushels of soybeans for export in the week that ended on Jan. 9, up from 58.798 million bushels the prior week, the government said in a report on Monday.

Soybean futures for March delivery rose 12 3/4 cents, or 1%, to $13.07 a bushel. Contracts for January delivery, the little-traded front-month contract, gained 12 1/4 cents, or 0.9%, to $13.39 a bushel on the CBOT.

Wheat gained on signs of strong demand for global supplies of the grain. EDF Man Capital analysts said in a Tuesday report that Japan intends to buy 180,000 tons of wheat, Jordan will retender for 100,000 tons and Egypt may look to the U.S. for more of the grain.

Brazil may have to continue buying U.S. supplies as Argentina, which reportedly approved export sales licenses of 1.5 million tons of the grain, still won't be able to ship enough wheat to meet its South American neighbor's needs, said Sterling Smith, a futures specialist at Citigroup in Chicago.

"It look like Brazil will be back in the market for wheat as the Argentine export license will be short of demand," he said.

Wheat futures for March delivery gained 5 3/4 cents, or 1%, to $5.79 1/4 a bushel on the CBOT.

Write to Tony C. Dreibus at tony.dreibus@wsj.com
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(END) Dow Jones Newswires
January 14, 2014 15:51 ET (20:51 GMT)
DJ Corn Falls as Price Spike May Spur Farmers to Sell -- Update->copyright

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