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Corn and Soybean Prices in Chicago Decline After Hitting Record Highs



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Corn and Soybean Prices in Chicago Decline After Hitting Record Highs

InfoSAWIT, KUALA LUMPUR – Corn and soybean prices in the Chicago futures market experienced a decline on Tuesday (January 14, 2025), after previously reaching record highs in recent months due to lower-than-expected production estimates in the U.S. Wheat prices also showed slight weakness.

The most active corn contract on the Chicago Board of Trade (CBOT) fell by 0.6% to $4.73-3/4 per bushel at 10:42 GMT, after hitting $4.77 on Monday, the highest level since December 2023. Meanwhile, soybean prices dropped by 0.3% to $10.50-1/4 per bushel after previously reaching $10.56-3/4, the highest since October 2, 2024.

According to Reuters, the U.S. Department of Agriculture (USDA) surprised the market last Friday by cutting its estimates for U.S. corn and soybean production for 2024, as well as reducing the forecast for ending stocks. This data reinforced the outlook for tighter supplies than previously anticipated.

This situation prompted many commodity funds to increase their long positions in corn and close short positions in soybeans. However, despite the most optimistic sentiment towards corn since 2022, soybeans are facing pressure due to ample global supplies.

U.S. corn demand continues to rise. The USDA reported that 1.44 million metric tons of corn were inspected for export in the last week, significantly above market expectations.

On the other hand, grain markets are monitoring whether the rain forecasted for the upcoming weekend can provide relief for crops in Argentina, which are currently under stress due to a heatwave. Additionally, attention is focused on record harvests in Brazil that are being hampered by rainy weather.

“Weather forecasts indicate a possibility of rain in Argentina, but whether it occurs or not, the crops will still experience a decline in quality,” said Andrew Whitelaw, an analyst at Episode 3, Canberra.

Wheat prices on the CBOT fell by 0.3% to $5.43-1/2 per bushel after previously reaching their highest level in over a week. The rise in corn prices on Monday also temporarily boosted wheat prices.

However, tight export competition, particularly due to a stronger U.S. dollar, along with USDA forecasts indicating an increase in U.S. wheat planting area, are limiting price increases.

In Russia, export prices for wheat, as one of the world's largest exporters, have remained stable since the beginning of the year due to weak global demand. (T2)


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