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Chicago grains, soybeans tumble as fundamentals discourage bulls

Xinhua, April 23, 2016 Adjust font size:

Chicago Board of Trade (CBOT) corn, soybean futures closed all sharply lower on Friday as improving weather and soybean production estimates from Argentina can not support investors bet on higher crop prices.

Chicago wheat led the losses as the most active wheat contract for May delivery lost 29.5 cents, or 5.86 percent, to close at 4.74 U.S. dollars per bushel. Soybean for May delivery dropped 31.25 cents, or 3.04 percent, to close at 9.9625 dollars per bushel. May corn delivery shed 14.25 cents, or 3.66 percent, to close at 3.755 U.S. dollars per bushel.

Wheat prices extended losses to a second straight session on Friday as investors took their profits after Chicago wheat surged to more than five-month highs in the midweek. Analysts said Goldman Sachs was out suggesting that the commodity rally in recent weeks has no fundamental footing.

The broad commodity rally since mid March is due to new money flowing into the CBOT from large hedge funds on expectations for big soybean losses in Argentina and corn damage of Brazil, according to AgResource company, a Chicago-based agricultural research institute.

Chicago soybeans also pulled back with falling below the key level of 10 dollars per bushel on Friday as soybean production estimates from Argentina were larger than expected. The Argentinian Ministry of Agriculture late Thursday lowered its estimate of the 2016 Argentine soybean crop at 57.6 million tonnes from 60.9 million. However, analysts noted that this estimate cooled the bulls on potential crop losses with favorable warm/dry weather offered across all agricultural areas for the next 2 weeks.

Additionally, a stronger U.S. dollar weighed on Chicago grains and soybeans for the day. The U.S. Dollar Index, a measure of the dollar against six major currencies, rose by more than 0.5 percent during the session. Generally, a stronger U.S. dollar can be a negative for agricultural commodities, priced in dollars because it makes them more expensive for non-dollar users, while a weaker dollar can support dollar-denominated commodities.

For the week, the most active corn contract for July delivery lost 1.7 percent, July wheat rose by 1.4 percent, while July soybeans gained 3.3 percent. Enditem