U.S. grains: Wheat tumbles on profit-taking off eight-year high

Chicago corn, soy follow

CBOT September 2021 wheat (candlesticks) with Bollinger bands (20,2). (Barchart)

Chicago | Reuters — U.S. wheat futures fell more than three per cent on Tuesday in a profit-taking setback after the most-active contract reached an 8-1/2-year high last week, traders said.

Corn and soybean futures followed wheat lower, with soybeans retreating from early advances despite fresh export sales of U.S. soy.

Chicago Board of Trade September wheat settled down 26 cents, or 3.4 per cent, at $7.34-1/2 per bushel (all figures US$). The decline marked a further retreat from Friday’s peak of $7.74-3/4, the highest on a continuous chart of the most-active wheat contract since February 2013.

CBOT November soybeans fell 6-3/4 cents to end at $13.61-1/2 a bushel, turning down after rising to $13.79-3/4, the highest since July 30. December corn ended down 5-1/4 cents at $5.63-1/2 a bushel.

Wheat futures eased following a surge last week, after the U.S. Department of Agriculture on Thursday made steep cuts to its monthly world crop projections, fuelling global supply concerns.

“Wheat’s been on a tremendous rally,” said Matt Wiegand, commodity broker for FuturesOne. “Having a correction here makes sense.”

A firmer dollar added pressure, making U.S. grains less competitive globally. The dollar rose, bolstered by safe-haven demand as investors fretted about Afghanistan and the spread of the Delta coronavirus variant.

After the close, Egypt, the world’s top importer, set an international wheat purchase tender. Brokers await results expected on Wednesday to get a gauge on global prices.

CBOT soybeans ended lower but found early support after USDA confirmed private sales of 198,000 tonnes of U.S. soy to China, the world’s top importer of the oilseed, and another 132,000 tonnes to unknown buyers. The deals were the latest in a string of recent sales.

Traders were monitoring U.S. reports from the annual Pro Farmer Midwest Crop Tour. The tour said on Monday that corn yield prospects and soybean pod counts were above three-year averages for Ohio and below averages for South Dakota.

The tour is expected to release figures for Nebraska and Indiana later on Tuesday.

Meanwhile, USDA late Monday lowered its condition ratings for the U.S. soybean and corn crops, bucking analysts’ expectations for no changes.

The reduced ratings tempered some analysts’ expectations for a boost to yields.

— Reporting for Reuters by Tom Polansek and Julie Ingwersen in Chicago, Gus Trompiz in Paris and Naveen Thukral in Singapore.

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