Chicago corn prices dipped to a new three-year low on Wednesday, as weather charts showed a hot, dry spell in Argentina will give way to widespread rain in the coming days, traders said.
Soybean futures also turned lower - with the most-active soybean contract on a continuous chart touching the lowest price seen since Dec. 15, 2020 - as projected rain in major Brazilian growing regions is adding to expectations of large South American supplies.
The market moves underscore how market participants are shifting their focus back toward forecasts of a glut of grain and oilseed production this year, said Karl Setzer, co-founder of Consus Ag Consulting.
“Right now, we don’t have a poor demand market,” Setzer said. “What we have is a supply problem. We are over-producing for what the world needs.”
That supply-and-demand concern is also what drove funds and other market participants to spend the day adjusting their positions before a clutch of crop reports on Thursday.
The slew of data will include Brazilian agency Conab’s update of the country’s official production estimates, Statistics Canada estimates on its country’s grain stocks, and the U.S. Department of Agriculture’s monthly U.S. and world supply and demand forecasts.
Setzer said the trade will particularly be watching the Conab estimate, after the USDA last month reported larger-than-expected Brazilian crops, as well as bigger U.S. yield and production levels for the recently harvested crop.
“Conab tends to trail the USDA in production numbers,” Setzer said, noting that if Conab’s numbers are relatively high, “that means the USDA number is probably pretty close.”
The most-active corn contract on the Chicago Board of Trade (CBOT) settled down 4-1/2 cents at $4.34-1/4 bushel. CBOT soybeans closed down 10-1/2 cents at $11.89 a bushel. CBOT wheat settled up 7 cents at $6.02 a bushel.