Chicago | Reuters –– U.S. wheat futures fell nearly two per cent on Friday after Russia raised its grain export forecast and dampened speculation that tight supplies would prompt curbs on overseas shipments from the world’s biggest wheat supplier.
Soybeans dropped to a three-week low as favourable weather boosted crop prospects in South America, overshadowing support from renewed Chinese buying of U.S. supplies.
Corn edged higher after hitting a three-week low in the previous session.
Russia’s agriculture ministry lifted its forecast for 2018-19 wheat exports by two million tonnes, to 37 million tonnes — a move interpreted by traders as another sign that the risk of export restrictions is easing.
Chicago Board of Trade (CBOT) March wheat fell 9-1/2 cents to $5.14 a bushel, its lowest since Dec. 6 (all figures US$). Selling accelerated as the contract breached chart support at its 20- and 50-day moving averages. The three per cent decline this week was the steepest drop in three months.
Soybean futures sank to the lowest point since before U.S. President Donald Trump and China’s Xi Jinping struck a 90-day trade war truce on Dec. 1. The detente sparked China’s first purchases of U.S. soybeans in six months.
China is expected to possibly purchase two million tonnes more of U.S. soybeans in the coming days after booking more than three million tonnes over the past two weeks.
Futures have struggled to extend rallies as the pace of buying was overshadowed by massive supplies and the start of a potentially record-large Brazilian harvest.
“For a short period of time it was bullish. Beans ran up last week and the market couldn’t build on it,” said Roy Huckabay, analyst with Linn + Associates. “There’s been a certain amount of disappointment in the amount of beans that China has bought.”
CBOT January soybeans fell 8-1/2 cents to $8.85 a bushel, ending the week down 1.7 per cent from a week earlier. March futures dropped 8-1/4 cents to $8.98, the contract’s first dip below the key $9 level this month.
CBOT March corn rose 3-1/4 cents to $3.78-1/2 a bushel after earlier hitting a three-week low. But the contract struggled to break above chart resistance at its 20-, 50- and 100-day moving averages. It ended down 1.6 per cent on the week, the steepest such drop in more than three months.
U.S. markets will be closed on Tuesday for the Christmas holiday. ICE Canada canola futures will be closed on Tuesday and Wednesday.
— Reporting for Reuters by Karl Plume; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.