U.S. grains: Wheat breaks six-session win streak

(Lisa Guenther photo)

Chicago | Reuters –– U.S. wheat futures fell 2.9 per cent from four-week highs on Thursday, with investors focusing on poor demand and plentiful global stocks ahead of a key government report, traders said.

Corn and soybeans firmed, with corn notching its seventh straight day of gains. Both commodities received support from harvest delays in eastern areas of the U.S. Midwest that pushed back the long-awaited replenishment of supplies at processors and elevators.

The setback in wheat followed six straight days of gains that added 6.3 per cent to the benchmark Chicago Board of Trade December soft red winter wheat contract.

“It seems that the rally ran out of steam as fundamentals globally remain a bit bearish,” said Greg Grow, director of agribusiness at Archer Financial Services. “U.S. wheat, when it rallies, tends to get a bit pricey in the world market.”

CBOT December wheat settled down 14-1/2 cents at $4.93-1/4 a bushel (all figures US$). Prices fell through technical support at the 30-day moving average.

“The U.S. Agriculture Department (on Friday) is going to remind us of a world that is flush with wheat,” said Tom Fritz, a partner with EFG Group in Chicago. “We have seen the short covering — it came and it went.”

The monthly supply and demand report was expected to show that 2014-15 U.S. ending stocks of wheat would be 704 million bushels, up six million bushels from the government’s estimate of a month ago and well above the 590 million bushels left over at the end of the 2013-14 crop year. Global wheat end stocks were estimated to come in at a robust 196.38 million tonnes.

USDA said Thursday morning that weekly export sales of wheat were just 372,400 tonnes, below the range of trade estimates for 400,000 to 600,000 tonnes.

CBOT December corn ended up 1-1/2 cents at $3.44-3/4 a bushel. The seven straight days of gains was the longest for the front-month corn contract since July 2013.

November soybeans rose seven cents to $9.42 a bushel. Soybeans also were supported by gains of 1.2 per cent in soymeal futures.

“Beans are recovering some recent losses as rains throw a wrench into the Midwest harvest while key Brazilian soy areas have none of that precipitation on tap,” Matt Zeller, director of market information for INTL FCStone, said in a note to clients.

Record crops of both corn and soybeans were expected in the U.S., keeping the futures gains in check.

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.

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