Corn and soybeans slump on supply glut, export competition | February 23, 2024

By P.J. Huffstutter

CHICAGO, Feb 23 (Reuters) - Chicago Board of Trade corn futures on Friday dipped below $4 per bushel in the front-month contract Cc1 for the first time since November 2020, as hefty U.S. and global supplies weighed over the market.

Chicago soybean futures also turned lower as weekly U.S. exports dropped to the lowest since last May, according to government data. News that at least three U.S.-bound cargo ships were preparing to load with soybeans at two ports in Northern Brazil also weighed on the market.

The speed at which corn prices have fallen has startled growers and market analysts, who say low prices could impact the U.S. farm economy as producers are finalizing their spring planting plans.

Most CBOT corn futures set new life-of-contract lows, with CBOT's March corn futures CH24ending Friday's trading session at $3.99-3/4 per bushel. CBOT corn was trading above $6 a bushel as recently as late June.

Meanwhile, projections released by the U.S. Department of Agriculture in October forecast that it would cost U.S. farmers about $4.80 per bushel to raise corn in 2024.

"There is literally nothing holding up the corn market right now, because we just produced too much," said Karl Setzer, partner at Consus Ag Consulting.

"It doesn't matter that we have corn demand, or that ethanol production is up 4.3% from last year, or that feed demand is perking up," he said. "There's just too much corn."

The U.S. Department of Agriculture said weekly U.S. soybean export sales hit a marketing-year low of 55,900 metric tons for 2023/24 in the week to Feb. 15, compared to analysts' estimates for 300,000 to 800,000 tons.

Buyers instead are turning to South America, where Brazilian soybean export prices are at a steep discount to the U.S. - to about $1.50 to $1.70 per bushel lower, traders said.

And CBOT wheat turned lower, following corn, amid news that the U.S. imposed extensive sanctions against top global wheat exporter Russia.

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 settled down 10-3/4 cents at $11.41-3/4 per bushel. CBOT corn Cv1 closed down 5 cents at $4.13-1/2 cents per bushel, while wheat Wv1 settled down 10-1/4 cents at $5.69 a bushel.

(Reporting by Naveen Thukral; Editing Eileen Soreng, Krishna Chandra Eluri, Josie Kao and David Gregorio)

Morning: Corn, soybeans recover from 3-year lows

By Naveen Thukral and Sybille de La Hamaide

SINGAPORE/PARIS, Feb 23 (Reuters) - Chicago corn and soybean futures edged higher on Friday, with bargain-buying lifting prices after both markets dropped to their lowest levels in three years, although plentiful supplies are likely to limit gains.

Wheat rose for a second session on supply concerns as potential U.S. sanctions against top global wheat exporter Russia could hit flows.

"As has been the case for some time now, the principal cause of price declines remains the improved international production outlook, built upon expectations for large harvests in major grain exporters, including Brazil and Russia," BMI, a unit of Fitch Solutions, said in a report.

"Meanwhile, the recent strength of the U.S. dollar has also weighed on the prices of agricultural commodities."

The most-active soybean contract on the Chicago Board of Trade (CBOT) rose 0.1% to $11.53-3/4 a bushel, as of 3:46 GMT, having dropped 1.5% this week.

Corn added 0.7% to $4.21-1/2 a bushel, having gained almost 1% this week. Wheat was up 1.3% at $5.87 a bushel.

Corn prices dropped to their lowest levels since late 2020 on Thursday.

Expectations of higher corn and soybeans production in top South American producers - Brazil and Argentina - are weighing on Chicago futures.

Argentina's corn and soybean crops continue to improve due to recent rains, the Buenos Aires grains exchange said on Thursday, with more rainfall expected in the coming days after wet weather conditions helped curb damages from a heat wave last month.

Following a record-large U.S. corn harvest in 2023, outlooks for rising grain stockpiles and falling Chinese demand for animal feed have spurred speculators to build massive net short positions in corn and soybean futures.

Strong competition on the global market has been weighing on wheat prices in recent weeks.

Ukraine has exported almost 4.3 million metric tons of grain so far this month, exceeding the 3.8 million tons exported over the same period a year earlier, agriculture ministry data showed on Friday.

Exports have included 11 million tons of wheat, 15.2 million tons of corn and 1.56 million tons of barley, it showed.

Most active contracts - Wheat, corn and soy US cents/bushel, Paris futures in euros per ton.

(Reporting by Naveen Thukral; Editing by Sherry Jacob-Phillips, Eileen Soreng and Krishna Chandra Eluri)