U.S. grains: Wheat, soybeans, corn fall sharply as supplies build

(Lisa Guenther photo)

Chicago | Reuters — U.S. wheat futures fell 2.9 per cent to their lowest in more than four years on Friday, matching a similar low in Paris wheat futures, as a global supply glut overwhelmed demand and pressured prices.

“Nearly every session wheat futures establish new contract lows, as supplies around the world are ample, and demand is not large enough to offset,” Joe Hofmeyer, analyst at CHS Hedging, said in a note to clients.

U.S. soybeans also plunged to their weakest since July 2010, while corn eased to contract lows as the market continued to focus on reports of bumper crops coming out of early harvested areas with the prospect of record production looming.

The huge harvests were expected to replenish thin supplies in the U.S. countryside as well as satisfy export demand. The U.S. Agriculture Department said on Friday that private exporters reported sales of 375,936 tonnes of corn to Mexico and 1.236 million tonnes of soybeans China for delivery during the 2014-15 marketing year.

“Even with pretty good export news, everybody is talking about the big yields coming out of the fields … and harvest really has not even started yet,” said Mike Krueger, president of The Money Farm, a grain marketing advisory service in Fargo, N.D.

A rally in the U.S. dollar, which was on track to post its 10th straight week of gains against a basket of currencies, has hurt export prospects for wheat by making U.S. grain more expensive overseas.

Chicago Board of Trade soft red winter wheat for December delivery closed down 14 cents at $4.74-1/2 (all figures US$). Wheat prices dropped 4.8 per cent this week.

In Europe, November wheat on the Paris-based Euronext market was down 3.6 per cent at 153.50 euros a tonne. It also set a contract low and four-year low for spot prices.

CBOT November soybeans were down 14-1/2 cents at $9.57 a bushel and CBOT December corn was down 6-3/4 cents at $3.31-1/2 a bushel. For the week, soybeans shed 12.2 per cent and corn was down 2.1 per cent.

“The downward slog continues for the grain markets,” Matt Zeller, director of market information for INTL FCStone said in a note to clients.

“Next week is looking like more of the same. Weather threats appear non-existent (for what it’s worth at this point anyway), while fresh data will be hard to come by until Sept. 30, and early yield reports promise to only reinforce massive crop ideas.”

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Colin Packham in Sydney.

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