Soybeans made new three month lows on technical and speculative selling, along with spillover from the outside markets. The dollar was sharply higher while the Dow, gold and crude oil were sharply lower. The Dow did manage to close well above the lows of the day. Beans are keeping an eye on the expected record South American crop and waiting for export cancellations by China; those Chinese concerns aren’t only linked to the South America crop, but also talk that Beijing will be tightening monetary policy. March closed under November’s low and the pit has lost nearly $1.25 since January 4. Meal and oil were lower with oil making three month lows on the outside markets, spillover from beans and generally negative tone in commodities.
Corn was lower on fund and technical selling, in addition to spillover from beans and the outside markets. Corn’s continuing to reel from last week’s USDA production estimate and the trade expects an increase in U.S. corn acreage in the coming year. The good South American crop weather is also a negative for corn. However, contracts are oversold and demand has increased after the recent drop in price, which helped corn close above the lows of the session. Ethanol futures were lower.
The wheat complex was lower on technical and fund selling, along with the higher dollar. When the dollar goes up, it makes U.S. goods more expensive on the export market. U.S. wheat’s already at a premium to other origins and the global supply is large. Contracts hit their lowest levels since early October prior to a late move off of the lows sparked by short covering. A Dow Jones Newswires interview with an economic researcher for Egypt’s Ministry of Trade and Industry has Egyptian wheat demand increasing from “around 14.5 million tons in 2009” to 17.2 million to 17.5 million tons over the next five years as population grows. Egypt is the world’s largest importer of wheat. Tunisia bought 92,000 tons of soft wheat and 25,000 tons of durum, both optional origin, and Bangladesh purchased 25,000 tons of Turkish milling wheat.
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