Markets sag under pressure from hefty global supplies

imageCHICAGO: US wheat futures dropped to a four-month low on Monday while corn and soybeans hovered near multi-month lows as large crop inventories kept a lid on prices.

Traders focused on hefty grain supplies as crop weather improved in South America, with scattered showers in Brazil easing concerns about drought curtailing soybean yields. Farmers in South America are advancing the soybean harvest, increasing competition for export business, analysts said.

In Canada, stockpiles of wheat and canola at the end of 2014 were thought to be among the biggest in recent decades, according to a Reuters survey of traders and analysts ahead of a Statistics Canada report on Wednesday.

“We’re still in a supply bear market,” said Don Roose, president of US Commodities in Iowa.

Chicago Board of Trade March wheat was down 1.8 percent at $ 4.93-3/4 by 11:50 a.m. CST (1750 GMT) after falling to a session low of $ 4.93-1/2, its lowest price since Oct. 10.

In the United States, a major snowstorm over the weekend dumped more than a foot of snow on Midwest wheat areas, providing a protective cover for the dormant crop. The deep snowfall also will slow the movement of grain early this week, traders said.

“Lower prices are certainly not going to entice anyone to go out into the cold snowy weather and move corn,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.

March soybeans were flat at $ 9.61 a bushel. On Friday, the contract fell to $ 9.55, its lowest since Oct. 21. March corn edged up 0.1 percent up to $ 3.70-1/2 a bushel, near a two-month low of $ 3.65-3/4 a bushel reached during the previous trading session.

Private exporters reported sales of 132,600 tonnes of US corn to Mexico, including 121,550 tonnes for delivery in 2014/15 and 11,050 tonnes for 2015/16, the US Agriculture Department said on Monday. The marketing year for corn begins on Sept. 1.

Copyright Reuters, 2015

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