Roundup: Chicago agricultural commodities settled lower over past week

Chicago Board of Trade (CBOT) grains closed lower on the week as crude oil prices quickly retreated from their rally above 50 dollars. The weakness in energy values was the key ingredient that is keeping the commodity futures price index range bound.

The most active corn contract for December delivery fell 6.25 cents weekly, or 1.76 percent, to 3.4875 dollars per bushel. December wheat delivery added 5.75 cents weekly, or 1.41 percent, to 4.1425 dollars per bushel. January soybeans dropped 21.25 cents weekly, or 0.6 percent, to 9.625 dollars per bushel.

December corn fell nearly 2 percent on the week amid long profit taking, the approaching November crop report and position squaring ahead of next week's US election.

There's little new to report, and it remains a market of both record supply and record demand. Analysts mention that there's no compelling evidence to support a lasting bear trend, with US Gulf corn the world's cheapest into May.

Recall South America's exportable corn surplus-which will be massive assuming normal weather-won't be readily available until June or July. The US export program should continue to build through next spring.

US ethanol margins also continue to soar, weekly ethanol production remains record large, and ethanol exports are much improved relative to recent years. Analysts suggest that traders use rallies to extend sales in the next 3-4 months, but they caution that without adverse South American weather US's newly found share of world trade evaporates rather quickly.

US wheat settled higher. Weakness was noted late in the week amid Egypt's decision to float its currency freely, which immediately raised the cost of imported wheat by 50 percent and will slow non-governmental purchases.

And in the near or medium Egyptian economic growth will struggle amid inflation, and the world's largest importer will face ongoing financing difficulties. It was a necessary step, though, for longer term growth.

Otherwise, despite weakness in futures, global cash markets are steady to higher, and of note Russian fob for spot delivery rallied again to 180 dollars per metric tons vs. 170 dollars metric tons in early autumn, as Russia's interior market continues to rally amid slow farmer selling.

Dryness is being watched across the US Plains, Central Europe and South Russia, and analysts advise sales only on rallies. The return of a bearish pattern awaits North Hemisphere spring weather.

It was a lower week of trade in the soybean market that was led by technical selling at the start of the week. Soybean export sales were reported at a high for the year, and the break in price triggered more export pricing and daily sales announcements.

The current export pace is running 30 percent ahead of last year, which has kept prices afloat. After the November crop report, the trade focus will increasingly turn towards Brazilian and Argentine planting progress or acreage estimates.

The outlook for South American production calls for another record large crop. But to achieve such a crop requires favorable weather. Endit