U.S. grains: Wheat falls on fund selling

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago Board of Trade wheat futures fell 2.7 per cent on Wednesday to a three-month low on technical selling, plentiful global supplies and forecasts for rains in the U.S. Plains, analysts said.

Soybean futures slid as soyoil prices hit their lowest in nearly six years, and corn also declined.

At the CBOT, March wheat settled down 13-3/4 cents at $5.05-1/4 per bushel (all figures US$).

March soybeans fell 3-1/2 cents at $9.70-1/4 per bushel, and front-month soyoil ended down 0.83 cent at 30.34 cents/lb. after touching 30.05, its lowest since March 2009. March corn finished down eight cents at $3.73-1/4 a bushel.

Wheat fell as the lead contract threatened to dip below $5 for the first time since October.

“There is nothing fundamentally to prove the funds wrong from profiting on these negative charts,” said Arlan Suderman, analyst with Water Street Solutions.

“We are getting good rains expected in dry areas of the Plains. We could have big deliveries on the March contract. We have ample supplies overseas that are cheaper because of our strong dollar,” Suderman said.

Others noted weakness in other commodities such as crude oil and gold. Mike Zuzolo of Global Commodity Analytics said the markets were in the grip of “a mindset that commodity demand is softening as the dollar goes up.”

CBOT soybeans followed soyoil lower on fears of an influx of South American supplies, following news that U.S. regulators will allow Argentine biofuel makers to qualify for U.S. biofuel credits.

An official with the U.S. Environmental Protection Agency said, however, that the new program will not prompt higher flows of fuel imports from the South American country.

Corn fell for a third straight session, with the March contract hitting its lowest since Nov. 5, on slowing demand for corn-based fuel ethanol as crude oil prices weaken.

“Corn is seeing downward pressure again because of export competition, especially from Ukraine, to U.S. supplies and unattractive ethanol margins as crude oil prices are at low levels,” said Stefan Vogel, head of agricultural commodity markets research at Rabobank.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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