U.S. grains: Chicago wheat sharply lower in technical sell-off

Chicago | Reuters — Chicago Board of Trade wheat fell nearly two per cent on Thursday in a technical sell-off amid outlooks for rain in the parched U.S. Plains crop belt, traders and analysts said.

Disappointing weekly U.S. wheat export sales added to headwinds, with CBOT May wheat dropping 10 cents to $4.78-3/4 per bushel, a two-week low (all figures US$).

The contract broke through support of its 200-day moving average, triggering long liquidation, according to Frontier Futures broker Joe Nussmeier. “That was a big chart moment,” he said. “Some of those fast fund types exited.”

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Wheat traders have been balancing dry growing conditions in the southern Plains against record-large global wheat supplies. Rains next week in the northeast section of that region should boost soil moisture, although parts of Kansas and Oklahoma were likely to remain abnormally dry, meteorologists said.

“Markets are still undecided between ample supplies and climatic risks in America underpinning prices in Chicago,” consultancy Agritel said in a note.

The state buyer for Egypt announced a purchase of 240,000 tonnes of Russian and Romanian wheat early on Thursday.

That was more wheat than the U.S. sold all of last week, when new sales totalled 219,500 tonnes, below expectations, according to U.S. Department of Agriculture data.

Meanwhile, export sales of U.S. corn of more than two million tonnes topped expectations and sales of about 1.3 million soybeans met estimates, USDA data showed.

CBOT May corn edged two cents lower to $3.86-3/4 per bushel, tracking declines in wheat.

CBOT May soybeans settled up 8-1/2 cents at $10.40-3/4 per bushel, recovering from an earlier roughly one-month low of $10.27.

Investment funds were net buyers of CBOT soybean futures and net sellers of wheat and corn, traders said.

Soybeans were bolstered in part by short-covering and strong U.S. demand for crushing.

U.S. soybean plants crushed more bushels of the oilseed than expected in February, exceeding last year’s processing pace for the month by 7.7 per cent and shattering a previous February record set in 2010, the National Oilseed Processors Association (NOPA) said.

“Looking at the big crush number, maybe that’s what’s pushing it,” Top Third Ag Marketing analyst Mark Gold said of soybeans.

— Michael Hirtzer reports on commodity markets for Reuters from Chicago; additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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