Soybeans and corn futures declined Tuesday for the second day in a row, one day after profit-taking funds sent soybeans plunging 15 cents, trimming a nearly month-long rally.
July soybeans closed 3 cents down Tuesday at $10.54-6 while July corn slid less than a penny, closing at $3.97-4. November soybeans were down 7 cents, at $10.29-2, while December corn closed unchanged at $4.02-6, analysts said.
The retreat came as a mystery buyer took 140,000 MT of soybeans Tuesday following a sale for the same amount of soybeans to an unknown buyer on Monday, according to DuWayne Bosse of Bolt Marketing in Britton, S.D..
“It was crazy trading,” Bosse said. “Soybeans started the morning off lower. By the middle of the day, they rallied back and ended by selling off again,” he said.
A favorable two-week weather forecast put pressure on prices, according to Bosse.
Some analysts attributed the brief rally to a weekly USDA report released Monday that showed 56% of the soybean crop planted.
“With less uncertainty in the market, prices usually go down,” Bosse explained. “As we get closer to the harvest, typically the price goes down. Going forward, soybeans are likely to drift lower, because farmers increased soybean acres when prices shot up after the May 10 USDA report, observed Bosse.
But Bosse also thinks that corn prices will rise on the increase in demand for exports to meet China’s feed demand in the next couple of weeks.
Other analysts predicted a sluggish market going forward. “We’re looking for sideways movement,” said Rich Nelson, of Allendale in McHenry, Ill. “The market has factored in the old news” of damage to South American crops, he said.
The question right now is Argentina’s ability to export soybean meal, Nelson said.
But diverging weather forecasts, with one private weather forecaster predicting severe drought, while others looked for a mildly dry summer, have also been influencing traders, he said.
Earlier in the week, funds cashing out positions drove down prices Monday, analysts said, especially for soybeans. “Money flow had a lot to do with it,” observed Chip Nellinger of Blue Reef AgriMarketing in Morton, Ill. “In the last couple of days, there have been lower markets in China, and profit taking by funds that were long in beans and short in corn,” Nellinger said, who said the funds were playing long beans against short corn.
Analysts said they are keeping a close eye on at the next two weeks. “During a weather season, it’s as far out as you can look,” explained Bosse. “You’re always two weeks away from a drought.”