Falling Chicago Corn Drags All Markets Lower

17/03/15 -- Soycomplex: Beans closed lower, under pressure from the ongoing South American harvest, with funds selling an estimated net 8,000 contracts on the day - which is the equivalent of over 1 MMT. Front month May 15 beans closed within 5 cents of a slump below $9.50/bushel. These levels may not be setting US farmers' hearts racing, but the acute weakness of the Brazilian real relative to the US dollar still makes things reasonably attractive for the Brazilian grower. Corn fell too, in fact by more in percentage terms (down 2.1% versus a daily fall of 1.5% in soybeans), which won't help to make planting that any more attractive to the US grower than beans this spring. Attention is now starting to focus on the USDA's planting intentions report due Mar 31. May 15 Soybeans closed at $9.54 1/2, down 14 3/4 cents; Jul 15 Soybeans closed at $9.59 1/2, down 14 1/4 cents; May 15 Soybean Meal closed at $317.50, down $6.20; May 15 Soybean Oil closed at 30.04, down 35 points.

Corn: The corn market closed sharply lower. Fresh news was generally lacking, and what was out there was bearish. "Generally speaking most commodities were lower on the day with corn setting the pace in the grains. Lack of supportive fundamentals and bearish news continues to mount," said Benson Quinn Commodities. Safras e Mercado reported that planting of the Brazilian safrinha corn crop was now 93% complete versus 85% a year ago. Reuters reported that China had bought more than 600 TMT of Ukraine corn since the beginning of the year. China continues to shy away from US corn due to GMO problems. South Korea reportedly purchased 205 TMT of Brazilian corn for September shipment overnight. The weak Brazilian real/strong US dollar story is as bearish for corn as it is for soybeans, with corn offers out of Brazil very competitive compared to US corn on the Gulf. Ahead of the USDA's plantings report, Informa are due to release their acreage estimates on Friday. Before that, the US Energy Dept are out tomorrow with their latest ethanol production and stocks data. May 15 Corn closed at $3.71, down 8 cents; Jul 15 Corn closed at $3.79, also down 8 cents.

Wheat: The wheat market closed lower, unable to hold onto overnight grains amid falling corn and soybeans. Early strength in wheat was probably tied to news that the proportion of Kansas winter wheat rated good to excellent fell from 46% to 41% during the past week. Oklahoma was down from 42% to 40% in the top two categories too. "Despite the wheat markets trading lower, there’s (still) reason to believe the trade is still wary of the net short fund position in the winter wheat markets," suggested Benson Quinn. They're probably right, but the downwards pull of soybeans and corn proved too much to resist, with funds selling an estimated net 3,000 Chicago wheat contracts on the day. There's a chance of limited light rains for the dry parts of the southern Plains, but a drought buster they won't be. The strength of the US dollar remains a problem for US wheat exports. The trade will therefore be hanging on every word from the Fed tomorrow, when it is due to release its latest statement concerning the US economy and maybe provide a clue to when US interest rates will start to rise. May 15 CBOT Wheat closed at $5.03 1/2, down 10 1/2 cents; May 15 KCBT Wheat closed at $5.42 3/4, down 12 1/4 cents; May 15 MGEX Wheat closed at $5.69 3/4, down 11 1/4 cents.