U.S. grains: Wheat futures drop sharply

CBOT March 2020 wheat with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — Chicago Board of Trade soft red winter wheat futures sagged 1.8 per cent on Tuesday, the biggest percentage loss for the most-active contract in two months, on a round of profit-taking and technical selling, traders said.

U.S. corn futures closed narrowly mixed, with nearby contracts weighed down by the drop in wheat and profit-taking after hitting a one-month high. Deferred contracts closed slightly higher. The corn market remained underpinned by the slow pace of harvest in the United States and strength in the cash market, traders said.

Soybean futures settled slightly firmer, with concerns about trade negotiations between the U.S. and China beating down any rally attempts. The soybean market had fallen for eight days in a row.

In its weekly crop progress report on Monday afternoon, the U.S. Department of Agriculture said 89 per cent of U.S. corn was harvested, up just five percentage points from a week earlier and compared with the five-year average of 98 per cent.

“There is still a lot of corn in the fields,” said Greg Grow, director of agribusiness at Archer Financial Services. “A lot of that is going to stay there for awhile. This is the time of year where farmers are not selling much.”

The slow country movement has supported basis levels in the cash market as dealers tried to entice farmers to book new deals.

CBOT March corn futures closed 3/4 cent lower at $3.81-1/4 a bushel (all figures US$). Prices hit resistance at Monday’s high of $3.84-3/4 a bushel.

CBOT January soybeans were 1/2 cent higher at $8.71 a bushel.

President Donald Trump’s saying a trade agreement with China might have to wait until after the U.S. presidential election in November 2020 hit markets worldwide.

Expectations of a bumper crop in Brazil added to the pressure on soybeans.

“Large South American harvests are just around the corner,” said Matt Ammermann, commodity risk manager with INTL FCStone. “China is believed to have already made large purchases of new crop South American soybeans so there is the question about how much U.S. soybeans China would need.”

CBOT March soft red winter wheat futures ended down 10 cents at $5.25-1/4 a bushel.

Egypt’s state grain buyer GASC said on Tuesday it bought 295,000 tonnes of Russian wheat at its latest international purchasing tender.

— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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