U.S. grains: Wheat falls on poor export data

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– Wheat futures on the Chicago Board of Trade fell 1.5 per cent on Thursday on disappointing U.S. export sales data, traders said.

Corn and soybeans also fell, retreating from six-week highs set this week, on improving crop prospects in South America.

At the CBOT, March wheat settled down 7-1/4 cents at $4.72-3/4 per bushel. March corn ended down 2-1/2 cents at $3.68-1/2 per bushel and March soybeans fell 2-1/4 cents at $8.74-1/2 a bushel.

Wheat fell after the U.S. Department of Agriculture reported weekly export sales of U.S. wheat at 66,200 tonnes, below trade expectations and the smallest weekly total since the 2015-16 marketing year began on June 1.

CBOT wheat futures have suffered in part due to record-large global stocks of wheat and stiff competition for export business.

“The problem is, no matter what you look at, we’ve got plenty of everything,” said Roy Huckabay with the Linn Group, a Chicago brokerage.

CBOT grains fell despite weakness in the dollar, which can make U.S. goods more attractive to those holding other currencies. The dollar index fell for a fourth day on diminished expectations of U.S. interest rate hikes this year.

Traders shrugged off smaller-than-expected Canadian wheat stocks data. Statistics Canada said Canadian wheat inventories fell 19 per cent to an eight-year low of 20.7 million tonnes as of Dec. 31. The figure fell below an average of trade estimates for 21.8 million.

Corn and soybean futures also felt pressure from ample world supplies, given favourable harvest prospects in Brazil and Argentina.

In Brazil, government crop supply agency Conab raised its forecast of the country’s total corn harvest to 83.3 million tonnes, from 82.3 million in January.

Conab trimmed its forecast of Brazil’s soybean crop to 100.9 million tonnes, from 102.1 million last month. But the new estimate would still represent a record-large crop, if realized, boosting global soy inventories at a time when U.S. farmers are deciding what to plant.

Also, beneficial rains were forecast for Argentina’s crop belt, easing concerns about dryness.

“The expansion of significant rains across nearly all Argentina corn/soy areas remains universally supported by guidance between late Friday and early Tuesday, offering timely relief to recent rain deficits in over half of the belt,” the Commodity Weather Group said in a note to clients.

Justin Madden and Julie Ingwersen report on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.

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