U.S. grains: Wheat records fourth month of decline

(Michael Thompson photo courtesy ARS/USDA)

Chicago | Reuters — Chicago wheat futures posted a fourth consecutive month of losses on Wednesday, pulled down by plentiful global supplies, while expectations of bumper U.S. harvests pressured soybeans and corn.

At the Chicago Board of Trade, most-active December wheat settled down four cents at $3.88-1/4 per bushel (all figures US$). December corn ended down 1/4 cent at $3.15-1/2 per bushel and November soybeans fell 7-3/4 cents at $9.43 a bushel.

Wheat posted the biggest percentage decline as the market struggled to find support after prices fell to 10-year lows.

Additional pressure stemmed from news that Egypt, the world’s biggest wheat importer, canceled its latest wheat purchase tender after receiving just one offer. It was Egypt’s first tender since the country on Sunday reinstated a zero-tolerance policy on ergot, a grain fungus.

“We are just not sure if the world’s No. 1 buyer is ready to start buying again. It cast a pall over the whole market,” said Mike Zuzolo, analyst at Global Commodity Analytics.

Wheat futures fell despite the U.S. Department of Agriculture’s confirmation that private exporters in the last day sold 138,000 tonnes of U.S. hard red winter wheat to unknown destinations.

Soybean futures declined for a seventh straight session as favourable weather in the U.S. Midwest bolstered expectations for a record-large crop.

A producer survey conducted by commodity brokerage and research firm Allendale Inc. projected the U.S. 2016 soybean yield at 48.5 bushels per acre, below USDA’s mid-August forecast of 48.9 but still the highest on record, if realized.

“Soybeans are still being pressured by the expectations of a huge U.S. crop despite brisk U.S. exports,” said Frank Rijkers, agrifood economist at ABN AMRO Bank.

Soybeans and corn followed a three per cent dip in crude oil after government data showed a large surprise weekly build in U.S. crude and distillate stocks. The 19-market Thomson Reuters CoreCommodity CRB Index fell about 1.4 per cent.

“It all seemed to change when we got the weekly crude and distillate numbers… It was kind of a chain reaction after those energy numbers came out,” analyst Zuzolo said.

For the month of August, spot CBOT corn fell nearly 10 per cent, its third straight monthly setback, while soybeans declined seven per cent, their second consecutive slide.

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

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