U.S. grains: Wheat to four-year lows on rising world supplies

(Lisa Guenther photo)

Chicago | Reuters –– U.S. wheat futures fell to a four-year low on Friday and posted their biggest weekly loss since July on weak export prospects and rising global supplies, traders said.

Corn futures followed wheat lower but held above the previous day’s multiyear lows, and soybeans firmed, underpinned by short covering ahead of forecasts for weekend frost in the Midwest.

At the Chicago Board of Trade, most-active December wheat settled down seven cents at $5.02-1/2 per bushel after setting a contract low at $5 (all figures US$).

The spot September contract, which expired during the session, dipped to $4.97, the cheapest spot price on a continuous chart since July 2010.

December corn ended down 2-1/2 cents at $3.38-1/2 a bushel, while November soybeans rose 3-3/4 cents at $9.85-1/4 a bushel.

The wheat market was still reeling from Thursday’s monthly supply/demand report from the U.S. Department of Agriculture, which cut its forecast of U.S. 2014-15 wheat exports.

USDA also hiked its forecast of 2014-15 global wheat ending stocks to 196.38 million tonnes, above the consensus trade estimate.

“It was extremely negative to see exports go down and imports go up,” said Mike Zuzolo of Global Commodity Analytics in Atchison, Kansas. “They (traders) are still pricing in very disappointing demand for U.S. wheat, as shown in the USDA numbers.”

Traders shrugged off concerns about freezing temperatures in Saskatchewan that could halt the growth and reduce the quality of immature wheat there. [Related story]

Corn followed wheat down, but benchmark December held above the contract low it set a day earlier.

USDA on Thursday projected the average U.S. corn yield at 171.7 bushels an acre, above its August estimate of 167.4. It saw the soy yield at 46.6 bu./ac., up from 45.4 bushels last month.

Analysts had expected yields of 170.7 bushels for corn and 46.3 bushels for soy, according to a Reuters poll.

Soybeans stabilized, underpinned by short-covering that helped pare losses late on Thursday.

“Despite all the euphoria, the anticipated record-high U.S. crops have not been actually harvested and… the crops could yet be damaged by an early frost,” Commerzbank analysts said in a note.

Maturing corn and soybeans in the northern Midwest may see an early freeze this weekend that could damage immature crops that are far behind in development.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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