Wheat falls most in two months

Chicago wheat futures fell nearly 3 percent on Monday, the most in two months, as rain in dry US areas encouraged the market to stay within its trading range after weather worries earlier drove prices to a three-week high. Traders were awaiting US government crop data later on Monday to see if weekend rain helped wheat. Poor ratings in the previous report fuelled last week’s rally.

Corn and soybeans dipped on spillover selling pressure. Technical sales also weighed on all three crops. Chicago Board of Trade December wheat shed 2.8 percent, or 14 cents a bushel, to $5.08. It earlier climbed close to Friday’s three-week peak of $5.23-1/2. The sell-off was probably not based on fundamental reasons but reflects a pullback to stay within a trading range, said Austin Damiani, commodities broker at Frontier Futures.

“The fundamentals of the market are known,” he said. Trading has stayed beneath the December wheat contract’s 200-day moving average of around $5.24-1/2 per bushel, a key resistance level, Damiani noted. Light weekend rain reached the central US Plains and south-western Midwest, Commodity Weather Group said. The US Department of Agriculture’s weekly crop progress report, due at 3 pm CST (2100 GMT), will provide further indications of the condition of US wheat, as well as progress in harvesting corn and soybeans.

Trade expectations were for the government to rate 50 percent of the US winter wheat crop as good to excellent, up from 47 percent a week earlier. CBOT December corn fell 1.5 percent, or 5-3/4 cents, to $3.76-1/2 per bushel. Plentiful US corn supplies hang over the market, but cash markets have been firm in the interior Midwest. January soybeans gave up 0.7 percent, or 7 cents, to $8.78-3/4 a bushel.

Selling pressure in wheat and corn spilled over to soybeans, said Mike Zuzolo, president of Global Commodity Analytics in Indiana. “There’s only so much that strong export demand can do for soy,” he said. Sustained Chinese demand had sheltered the market from worries that China’s slowing growth would affect other commodities. Private exporters reported sales of 120,000 tonnes of US soybeans to China for delivery in 2015/16, the USDA said Monday.

Copyright Reuters, 2015

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