Chicago | Reuters — U.S. wheat futures fell to their lowest level in 1-1/2 weeks on Friday, surrendering more gains from a recent rally, weighed down by plentiful supplies and slow export sales.
Corn and soybean prices also eased, with overall favourable U.S. crop conditions contributing to the downward pressure on prices.
Wheat slid from Wednesday’s two-month high after the U.S. Department of Agriculture said heavy rain in the southern and central U.S. Plains had boosted crop yields, despite concern over winter wheat quality that had fuelled this month’s spike.
Rains continued on Friday, delaying harvest and prompting short-covering gains in K.C. wheat futures. But more-active Chicago Board of Trade wheat declined for the third session in a row, with CBOT July wheat finishing 1/2 cent lower at $5.03-3/4 per bushel, shedding about 2.5 per cent for the week (all figures US$).
Top global wheat importer Egypt bought wheat for the second straight day, purchasing 180,000 tonnes of Romanian and Russian wheat.
Global supplies remain amble and demand for U.S. wheat is weak at current price levels, said Brett Cooper, senior manager for markets at FCStone Australia.
“To find a supply side issue for wheat right now is tough. Yes, there’s a potential quality story in the U.S., but at this stage it’s not enough to tighten the balance sheet,” he said.
Rains forecast during the next two weeks in the Midwest will be “welcome” for growing corn and soybean plants even as “excess moisture” in portions of Illinois, Iowa and Missouri could hamper crop development, Commodity Weather Group said in a research note.
CBOT July corn settled 3-1/2 cents lower at $3.53 per bushel, also a roughly 1-1/2 week low. The contract shed more than two per cent for the week.
Soybeans for July deliver ended flat at $9.40 per bushel, eking out a 0.2 per cent gain for the week.
“Weather forecasters continue to expect a mostly helpful outlook for U.S. corn crops other than in the Corn Belt’s southwestern corner where continuing problems with excess moisture are likely to prevent a little planting,” Commonwealth Bank of Australia analyst Tobin Gorey said in a market note.
China, the world’s second-largest corn consumer, is likely to cut the government support price for the 2015-16 harvest to encourage greater use of domestic grain and bring down the volume of cheap imports, industry sources said.
— Michael Hirtzer reports on grain markets for Reuters from Chicago. Additional reporting for Reuters by Nigel Hunt in London and Manolo Serapio Jr. in Singapore.