Corn falls to the lowest price in four months in Chicago and drags soybeans and wheat
American harvest estimated to be the second largest on record and weak foreign sales weigh on CBOT, according to Money Times.
BY THE X-TRADER NEWS NEWSROOM · REPORTING FROM MONEY TIMES · 2 MIN
Corn futures contracts on the Chicago Stock Exchange (CBOT) fell this Tuesday to their lowest price in four months, according to Money Times. In the same movement, soybeans reached their lowest price in two and a half months and wheat also fell.
According to analysts cited by Money Times, the drop reflects expectations of abundant harvests in the United States and concerns about demand for exports. In other words, the market sees a loose supply, at the same time that external demand does not support prices.
US corn sales for export were lower than expected and weighed on the CBOT, according to the vehicle. This data is usually closely monitored by operators, because it shows whether the American product remains competitive in the international market.
Analysts also recalled that the US Department of Agriculture (USDA) estimated the country's corn harvest as the second largest on record. A volume of this size reinforces the reading of a comfortable offer for the remainder of the season.
In wheat, prices also lost strength. Operators are following the peace negotiations between Russia and Ukraine scheduled for next week, and Money Times recalls that the two countries are among the largest exporters of the cereal. Any advance on this topic could affect the global supply flow.
What is at stake is the combination of abundant supply with less firm external demand, at a time when geopolitics also comes into play in agricultural prices.
What changes for the investor
For those who follow commodities as a cost and margin thermometer, the decline has different readings. In theory, cheaper grains alleviate expenses for processors and those who buy feed, but reduce the revenue of producers and companies that depend on firm prices to sell seeds and inputs. As these contracts are quoted in dollars on the CBOT, the exchange rate also enters the equation. This article does not provide a purchase or sale recommendation: each investor must evaluate their exposure to the sector according to their own profile and planning.
Automatically translated from Portuguese.
