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U.S. corn futures slumped to three-year lows Wednesday, with soybeans and wheat following the lower trend, halting rallies from the previous session.
Analysts said plentiful domestic grain supplies and strong South American crop prospects weighed on sentiment, with some also attributing the selloff to commodity funds adding to their already-large net short positions.
Corn (C_1:COM) for March delivery closed -2% to $4.10 1/4 per bushel on the Chicago Board of Trade, the lowest since November 2020, while March soybeans (S_1:COM) settled -1.6% to $11.60 1/4 per bushel and wheat (W_1:COM) for May delivery ended -0.3% to $5.77 1/2 per bushel.
ETFs: (NYSEARCA:CORN), (NYSEARCA:SOYB), (NYSEARCA:WEAT), (DBA), (MOO)
Expectations for strong supplies for the upcoming crop year continue to keep any momentum in grains in check, analysts said.
“It’s going to take a massive fundamental shift to turn the tide and bring the grains off lows,” Matt Zeller of StoneX said, adding that speculative funds “continue to push the market further into the net short position overall.”
The CFTC reported larger net short positions for corn and soybeans Friday, but some analysts said the rate that grain futures are sinking has slowed.
Corn also was pressured by reports that the Biden Administration soon will unveil new rules that may disrupt the use of ethanol in favor of other biofuels.
Other reports said the administration would approve a request from a group of Midwest governors to allow year-round sales of gasoline with higher blends of ethanol but push the start date to 2025.