Chicago/Reuters – Chicago Board of Trade wheat futures dropped 3.1 percent to their lowest in nearly four months on Thursday, with investors beating back an overnight rally attempt amid plentiful global supplies.
Wheat closed near session lows as the dollar rebounded into positive territory late in the trading day. A firm dollar makes U.S. wheat relatively more expensive on the export market.
The drop in wheat pressured corn futures, which hit their lowest in nearly three weeks. Soybeans also weakened, giving up gains made overnight on signs of easing softening export demand.
Wheat notched the biggest losses. Traders noted that the weather forecasts for the U.S. Plains and Midwest called for little pressure on winter wheat crops as they near maturity.
“The only thing positive (in wheat) has been short-covering by the funds and that kind of runs it course and runs out of gas,’ said Bill Gentry, a broker at Risk Management Commodities in Lafayette, Indiana.
Chicago Board of Trade soft red winter wheat for July delivery settled 12-3/4 cents lower at $4.21-3/4 a bushel. The July contract bottomed out at $4.21, its lowest since Dec. 23, during the session.
CBOT July corn futures ended down 4 cents at $3.64-1/4 a bushel. Corn prices hit their lowest since March 31.
CBOT May soybeans dropped 3-1/2 cents at $9.46-3/4 a bushel.
The U.S. Agriculture Department on Thursday morning said weekly export sales of soybeans fell to 225,000 tonnes (old-crop and new-crop combined), below trade forecasts for 400,000 to 800,000 tonnes.
Corn export sales came in at 848,200 tonnes, near the low end of expectations. Export sales of wheat were 551,100 tonnes.
All three commodities firmed during overnight trading but excess supplies kept a bearish tone in place and pulled the market into negative territory shortly after the daytime opening.
“The market is still grappling with the enormous task of finding homes for season 2016 crops,” said analyst Tobin Gorey of Commonwealth Bank of Australia.
“Season 2017 planting in the U.S. Midwest has gotten off to a slower than normal start, but investors appear to have pared back their level of concern,” he added.
– Additional reporting by Manolo Serapio Jr. in Manilla and Nigel Hunt in London.