U.S. grains: Wheat nears four-week low on weak export demand

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — Chicago wheat futures fell to a near four-week low on Monday on plentiful global inventories and weak demand for U.S. supplies, analysts said.

Soybeans turned down after touching a two-week high and corn drifted lower on a day when U.S. government offices, including the Department of Agriculture, were closed for the Columbus Day

Chicago Board of Trade December wheat settled down 7-1/2 cents at $4.36 per bushel after hitting $4.35-1/2, the contract’s lowest since Sept. 12 (all figures US$).

Wheat sagged as export business remained slow.

“We have got to see demand pick up and we just haven’t seen that,” said Mark Gold, managing partner at Top Third Ag Marketing. “The Russian wheat crop is big and they certainly have a competitive advantage. And we don’t seem to be able to get any business done.”

Additional pressure stemmed from improving soil moisture in U.S. winter wheat regions, where planting is under way. Rains crossed the southern U.S. Plains last week and showers were forecast in the Midwest this week.

Those storms should slow the harvest of fall crops, a factor that lent underlying support to soybeans and corn. USDA was scheduled to release its weekly crop progress report on Tuesday, a day later than usual due to Monday’s holiday.

November soybeans ended down 5-1/2 cents at $9.66-3/4 per bushel, after encountering chart resistance near the contract’s 200-day moving average. December corn finished down 1/2 cent at $3.49-1/2 a bushel.

Traders were reluctant to take on big new positions ahead of USDA’s monthly supply/demand reports on Thursday. Analysts surveyed by Reuters expect the government to raise its estimates of U.S. corn and soybean yield and production in those reports.

Worries about dry conditions in parts of Brazil, the world’s No. 2 soybean grower after the United States, helped underpin soy futures.

“Weather forecasters continue to expect soybean regions in Brazil’s Mato Grosso state to see no material gains in soil moisture for another week or so,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

Soybean planting in Brazil was 5.6 percent complete as of Friday, consultancy Safras + Mercado said, down from 10.4 per cent at this time last year, as dry weather for most of September delayed seeding.

CBOT soyoil futures bucked the lower trend, rising 0.31 cent at 33.26 cents/lb., in technical moves after the U.S. Commodity Futures Trading Commission’s weekly report late Friday showed funds slashed their net long position in CBOT soyoil in the week to Oct. 3.

— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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