Chicago soybean further sank on Tuesday, under pressure from hefty supply of South America soybeans and stronger greenback. Corn rallied 1.1 percent, as traders expected a lower yield and tighter ending stocks for next week's U.S. government production estimates.
The most active corn contract for December delivery rose 7.25 cents, or 1.1 percent, to close at 6.5425 U.S. dollars per bushel. December wheat added 1.75 cent, or 0.3 percent, to 6.3 dollars per bushel. January soybean dropped 14.75 cents, or 1.2 percent, to close at 12.025 dollars per bushel.
Global equity and commodities markets plummeted Tuesday, as investor's risk appetite dwindled amid mounting fear over the impact of a potential Greek debt default on the eurozone economy, after Prime Minister George Papandreou announced Monday night his decision to let Greeks vote on a bailout package.
"Today, we had volatility in the grains, coinciding with volatility in the outside markets, large movements in gold, large movements in stock indexes," said Chris Robinson, senior risk manager and trader at Top Third Ag Marketing.
"Traders are continuing to watch outside markets, tremendously volatile markets in the stock indexes as well as the gold and crude oil. They impacted these grains," Robinson added.
The early selling from fund traders and speculators dragged the grain market down and the continued strength in U.S. dollar also weighed on the grain market, by eroding prospects for U.S. exports and reducing the investment appeal of commodities.
According to a USDA weekly export inspections report released on Monday, U.S. soybean inspections reached 48.5 million bushels last week versus 43.9 million bushels the week prior and four-week average of 21 million bushels.
"Sales are soaring but were running under a year ago as China is booking South American beans at a better pace for next spring delivery when the harvest is in," said Tim Hannagan, senior grains analyst at PFGBEST here in Chicago.
"Any talk of bad weather in Brazil during November through March 1 and we will see China overbooked U.S. beans as a hedge against Brazil's output, so we will watch their weather closely now," Hannagan added.
Market analysts pointed out that the favorable South American weather conditions may continue to weigh on soybean prices as crop prospects are looking good right amid rapid planting progress in Brazil and improved moisture conditions in Argentina.