U.S. grains: Wheat, corn slump as export demand weakens

(Lisa Guenther photo)

Chicago | Reuters –– U.S. wheat futures fell 2.2 per cent to a six-week low on Thursday on poor export demand and easing concerns about crop damage despite sub-zero temperatures settling in across key U.S. growing regions, traders said.

“Yes, it did get very cold overnight,” Joe Barker, market analyst at CHS Hedging said in a note to clients. “But I would say that it was generally not quite as cold as forecasted. I have already seen reports from private forecasters that are walking back their initial concerns about winterkill.”

Forecasts called for the deep freeze to last for the next few days. Warming temperatures are expected to arrive early next week.

Weak exports also weighed on corn, which fell for the seventh time in eight sessions. Soybean futures dropped on a profit-taking setback after overnight strength pushed prices to a 10-day high.

Wheat came under pressure following a U.S. Agriculture Department report that showed weekly export sales for the 2014-15 marketing year came in at a disappointing 151,000 tonnes.

The decision by Egypt’s GASC to buy 180,000 tonnes of French wheat in their latest tender illustrated how uncompetitive U.S. supplies were on the world market.

Chicago Board of Trade soft red winter wheat for March delivery ended down 12-1/2 cents at $5.67 a bushel (all figures US$). The session low of $5.65-3/4 was the lowest for the front-month contract since Nov. 28.

CBOT March corn was two cents lower at $3.94-1/4 a bushel, with traders citing technical weakness after the market failed to hold overnight gains.

“Corn was easier most of the session, slipping on some chart selling and anticipation of index fund rebalancing,” Charlie Sernatinger, analyst with ED+F Man Capital, said in a note to clients.

Strength in the dollar, which held at nine-year highs against a currency basket, and caution ahead of closely watched government crop estimates kept bargain hunters on the sidelines.

CBOT March soybeans were down eight cents at $10.48-1/4 a bushel, snapping a three-session stretch of gains despite bigger-than-expected weekly export sales and a flash 118,000-tonne sale to China.

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

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