Grain, soybean futures slide as investors shed risk

Uncertainty over Black Sea grain supplies weighs on wheat
calendar icon 29 July 2023
clock icon 2 minute read

Chicago soybean and grain futures turned lower on Thursday, as investors began shedding risk amid signs that the hot weather in the US Midwest this week could be short-lived, reported Reuters.

Soybean and corn futures both experienced choppy trading, as the US dollar turned higher, analysts said.

Soybeans turned sharply lower, as traders shrugged off a US Department of Agriculture report that US soybeans were sold to unknown destinations. Wheat futures also faced a rocky session, as market players waited to have a clearer view on global grain exports out of the Black Sea, traders said.

But it was the Midwest's weather outlook, which has fuelled volatility in the grains market, that weighed heaviest on prices on Thursday, traders said.

Several weather forecasters are predicting more crop-favorable weather as the region's corn finishes pollinating, a key growth stage in determining yields, while soybeans approach their pod-setting phase in August, said Karl Setzer, brokerage research lead with Mid-Co Commodities.

"They're not calling for Dust Bowl days in August," Setzer said. "Add that to the managed money crowd moving into equities, crude oil and the US dollar, and that's why you're seeing everything down in the grain futures today."

Meanwhile, scouts on the second day of an annual US crop tour late on Tuesday projected spring wheat in northwest and north-central North Dakota will produce lower yields than last year, but bigger than the five-year average.

"Everyone it talking about the heat, but some of the soft red wheat yields are going to be phenomenal," said Brian Burke, president of trading firm John Stewart & Associates.

The most-active wheat contract on the Chicago Board of Trade (CBOT) settled down 7-1/4 cents at $7.12-3/4 a bushel.

Corn was down 6 cents at $5.42-1/4 a bushel, and soybeans fell 22 cents to $13.98 a bushel.

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