U.S. grains: Wheat, corn, soy fall on month-end fund selling

(Lisa Guenther photo)

Chicago | Reuters — U.S. wheat, corn and soybean futures fell to multi-month lows Friday on commodity fund liquidation at the month’s end amid ample world stocks and fears of slowing growth, traders said.

“We are building in record crops in South America, and we are washing out some spec length. Nobody can look at a chart objectively and say they look positive,” said Jason Ward, an analyst with Northstar Commodity.

At the Chicago Board of Trade, March wheat settled down five cents at $5.02-3/4 per bushel (all figures US$). March corn finished down 1-1/2 cents at $3.70 a bushel, paring losses toward the close. March soybeans fell 7-1/4 cents at $9.61 a bushel.

Wheat posted the biggest percentage losses of the three, with the lead contract dipping below $5 for the first time since mid-October. World wheat output is projected at a record high for 2014-15, and the U.S. Agriculture Department this month raised its forecast of global ending stocks.

Also bearish, storms were forecast to bring moisture to the U.S. Plains wheat belt this weekend, while snowfall expected in the Midwest should insulate dormant crops from a cold spell next week, the Commodity Weather Group said.

Worries about global growth hung over the market.

“The Brazilian real and Russian rouble are soft while the Canadian dollar and Mexican peso have fallen to new lows. This reinforces the theme that financial markets are struggling with deflation and slow economic growth in many nations,” Helen Pound, a vice-president with Wedbush Securities, wrote in a note to clients.

For the month, wheat fell 14.7 per cent, its biggest setback since September 2011. Corn slid 6.8 per cent and soybeans fell 5.7 per cent, the largest declines for each product since September 2014.

Crop weather has improved in South America, with scattered showers in Brazil this week easing concerns about drought curtailing soybean yields.

Grains analyst Safras + Mercado lowered its forecast for Brazil’s 2014-15 soy crop to 95.0 million tonnes, down from 95.9 million in December but still a record high. USDA this month raised its Brazilian soy forecast to 95.5 million tonnes, from 94 million last month.

— Julie Ingwersen 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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