By Michael Hirtzer
CHICAGO, Sept 4 (Reuters) – U.S. corn and soybeans futures
fell more than 1 percent to their lowest levels in four years on
Thursday in a technical selloff sparked by the looming harvest
of record-large crops.
Wheat futures also were mostly lower after notching contract
lows in the previous session. The dollar climbed to its
highest point in more than a year against a basket of other
currencies, further weighing on U.S. grains as importers could
more cheaply source supplies priced in other currencies.
“The corn action more than anything else is technical,” said
analyst Roy Huckabay of the Linn Group grain brokerage in
Chicago. “We’ve gone sideways for two months, and when we broke
out of that trading range, it created a pretty heavy round of
technical selling.”
Corn on Wednesday broke through the most recent lows,
notched on Aug. 12, to fall to the lowest point since June 2010
on a continuous chart after the U.S. Agriculture Department
unexpectedly boosted good-to-excellent conditions ratings for
the U.S. corn and soybean crops.
After the USDA announcement late on Tuesday, several private
analysts lifted their own crop estimates beyond already record
forecasts for the corn and soy harvests.
“Technically, getting below $3.60 (per bushel of corn) opens
the door to $3.35,” Huckabay said.
Most-active Chicago Board of Trade December corn was
down 6-1/4 cents, or 1.8 percent, at $3.45-3/4 per bushel as of
11:29 a.m. CDT (1629 GMT) after hitting a contract low of
$3.43-3/4.
Soybeans for November delivery were down 15-1/4 cents
at $10.05 per bushel after touching a lifetime low of
$10.03-1/2.
Investors were pricing in a larger crop on expectations that
the USDA will increase its own outlook in the next monthly
supply and demand report, due on Sept. 11.
“There is a large crop coming our way in the U.S., and
conditions have been favourable,” said Graydon Chong, senior
grains analyst at Rabobank. “From our perspective, we expect
some upward revisions in the USDA corn forecast.”
Crop forecaster Lanworth on Wednesday lowered its forecast
for the U.S. 2014 corn yield, but its production projection was
still higher than the USDA.
Research advisory firm Allendale Inc said on Wednesday it
forecast the 2014 U.S. corn crop at 14.409 billion bushels,
above the government’s latest estimates.
The big harvest projections come as U.S. corn is struggling
to compete in international markets with cheaper offerings out
of Argentina and the Black Sea region, plus large volumes of
feed wheat as more of the European wheat crop than usual is
expected to fall short of milling quality.
The competitiveness of U.S. wheat has been curbed by
strength in the dollar, which on Thursday set a one-year high
against the euro after the European Central Bank cut interest
rates to record lows.
CBOT December wheat fell 3 cents to $5.32-3/4 after
hitting a contract low of $5.27-1/2 earlier in the day.
(Additional reporting by Colin Packham in Sydney and Gus
Trompiz in Paris; Editing by Joseph Radford, Susan Thomas and
Lisa Von Ahn)