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Chicago grains, soybeans show weakness ahead of Christmas holiday

Xinhua, December 23, 2015 Adjust font size:

Chicago Board of Trade (CBOT) wheat, corn and soybean futures closed all lower for a second straight session on Tuesday, in thin, choppy trading that focused on the upcoming South American harvest.

CBOT grains led the losses as the most active wheat contract for March delivery dropped 7.25 cents, or 1.51 percent, to close at 4.7175 dollars per bushel. Corn for March delivery lost 5.75 cents, or 1.55 percent, to close at 3.6625 U.S. dollars per bushel, while March soybeans delivery shed 6 cents, or 0.67 percent, to close at 8.855 dollars per bushel.

Wheat prices fell by more than 1 percent for a second day in a row, depressed in part by talks that Russia's government would discuss lowering an export duty on wheat in early 2016, which could lead to increased exports from that country, putting more pressure on U.S. crop sales.

Chicago corn also slid Tuesday as prices for crude oil stayed at multi-year lows and South America will kick off the crop harvest season.

A day earlier, U.S. oil slid below 34 U.S. dollars for the first time since 2009. Lower prices for oil are typically seen as a negative in the corn market, as they often discourage refiners from blending ethanol, a corn-based biofuel, into the nation's gasoline supply, buffeting demand for the grain.

Analysts noted that the window for U.S. exports to catch up is now quickly closing with Brazil starting harvest of a record large crop in late December or early January, as well as large scale exports to be underway in late February.

Moreover, the devaluation of the Argentine Peso will push large tonnages of Argentine supply into the world market in the upcoming months, the analysts added.

For the day, soybeans came under pressure by easing concerns about insufficient rains curbing Brazil's soybean production.

The Global Forecast System (GFS) Tuesday morning forecasted lite to moderate rains for the next 48 hours across the northern brazil before an extended five- to seven-day period of warm and dry weather returns, and there are indications of soaking rains in this area in the 10-to 15-day period.

"If the extended GFS weather models are correct in their calls for soaking rains for Mato Grosso and Goias, a top should be scored right before the start of the holidays," said analysts from AgResource company, a Chicago-based agricultural research institute. Enditem