Chicago | Reuters – Chicago Board of Trade wheat futures slid on profit-taking on Wednesday, traders said, after prices this week climbed to their highest level since 2012 on tightening world supplies and robust demand.
Losses also hit the corn market, which retreated after rising on Tuesday to its highest price since Aug. 12.
Wheat futures had recently surged on a flurry of export deals to buyers, including Saudi Arabia and Egypt, and on concerns about poor spring wheat harvests. The gains had helped to support the neighboring corn market, as both grains are used for animal feed.
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Bargain buying and short covering lifted U.S. corn futures on Monday after the market slid to contract lows on expectations for strong U.S. output, traders said.
“The corn market has become overbought,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.
The most-active wheat contract on the Chicago Board of Trade ended down 10-1/2 cents at $7.81 a bushel, after hitting a December 2012 high of $8.07 a bushel on Tuesday.
Most actively traded corn lost 9 cents to close at $5.64 a bushel, and soybeans slid 12 cents to $12.44-1/4 a bushel.
Spillover pressure from sharp losses in oil prices weighed on the grain markets, analysts said.
But wheat futures may resume their rally after taking a breather, Commerzbank said in a note.
“So long as there are no signs of demand being slowed by the elevated price level, we believe that further highs are on the cards,” Commerzbank said.
Traders are waiting for the U.S. Department of Agriculture to issue monthly World Agriculture Supply and Demand Estimates (WASDE) on Nov. 9.
Analysts polled by Reuters on average expect the agency to report higher U.S. corn and soybean production and yield estimates than October.
“The corn market has had a nice runup, but we would be cautious about pushing the long side too much at these price levels, at least until the WASDE numbers are behind us,” Pfitzenmaier said.
– Additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.
