CHICAGO, July 29 (Reuters) – U.S. wheat futures fell 2.8 per cent to fresh contract lows on Tuesday due to plentiful global supplies as well as strong competition on the export market, traders said.
Corn and soybean futures also fell as forecasts for rain in the U.S. Midwest next week alleviated concerns about dry conditions reducing harvest prospects for both crops.
The drop in soybeans broke a string of five straight positive closes. Traders noted investors putting more shorts into the soy market after prices hit a two-week high on Monday.
Wheat posted the biggest losses, weighed down by big production forecasts in Ukraine, Russia and Australia. Supplies were moving from troubled countries in the Black Sea region with no problem, adding further pressure to prices.
“With the increased sanctions (in Russia), we are not seeing any risk premium coming into the wheat,” said Mike Zuzolo, president at Global Commodity Analytics. “The trade just does not have any fear factor or risk premium in these markets yet.”
Chicago Board of Trade soft red winter wheat for September delivery closed 14-3/4 cents lower at $5.20 a bushel after hitting a contract low of $5.18-1/2 earlier in the session.
CBOT September corn dropped 6-1/4 cents to $3.61-1/2 a bushel and CBOT August soybeans fell 10 cents to $12.26-1/2 a bushel.
“Corn got hit again as weather forecasts went from dry to rain promised for the end of next week,” Charlie Sernatinger, analyst with ED&F Man Capital, said in a note to clients.”
Beans went from darling to deathbed in one day, as weather forecasts fired up rains for the end of next week, and the shorts piled back into the contract in style.”
Storms on Sunday and Monday should bring 0.5 inch (1.27 cm) of rain to northwestern areas of the U.S. Corn Belt, including Minnesota and Iowa. Showers expand into the rest of the Midwest later in the week.
“It’s a little wetter than it was yesterday,” said Andy Karst, an agricultural meteorologist at World Weather Inc. “It’s not a big soaker for the whole Midwest, but it looks like everybody is going to get some rain from Sunday into the middle part of next week.”
Prices at 1412 CDT (1912 GMT):
LAST NET PCT YTD
CHG CHG PCT CHG
CBOT corn 361.50 -6.25 -1.7 -14.3
CBOT soy 1229.00 -10.00 -0.8 -6.4
CBOT meal 396.50 -6.30 -1.6 -9.4
CBOT soyoil 36.28 -0.27 -0.7 -6.5
CBOT wheat 521.00 -14.75 -2.8 -13.9
CBOT rice 1312.00 20.50 1.6 -15.4
EU wheat 175.25 -3.00 -1.7 -16.1
US crude 100.92 -0.75 -0.7 2.5
Dow Jones 16,960 -22 -0.1 2.3
Gold 1,300.39 -3.60 -0.3 7.9
Euro/dollar 1.3411 -0.0028 -0.2 -1.8
Dollar Index 81.2040 0.1790 0.2 1.5
In U.S. cents, benchmark contracts, except EU wheat (euros) and soymeal (dollars). CBOT wheat, corn and soybeans per bushel, rice per hundredweight, soymeal per ton and soyoil per lb.
Mark Weinraub writes for Reuters news service in Chicago