Chicago | Reuters — Chicago wheat and soybean futures fell sharply on Friday in a technical sell-off following U.S. government data on Thursday that raised the outlook for end-of-season stockpiles of the crops, traders said.
Wheat declined to a 1-1/2-week low and soy dropped 2.5 per cent, while corn futures were down about 0.7 per cent, holding near Thursday’s seven-month high on the Chicago Board of Trade.
Forecasts for small amounts of rain in Argentina added to bearish sentiment even as the precipitation might be too late to help some soy and corn fields in the South American nation. Dry conditions in Argentina and in the southern U.S. Plains winter wheat belt helped propel prices for all three commodities to multi-month highs this month.
“It’s gravity,” said independent wheat trader Austin Damiani. “We’ve absorbed a huge amount of speculative buying over the past couple weeks, so the market is retracing. We’re still far away from (wheat export) demand.”
CBOT May wheat was down 10 cents to $4.89-1/4 per bushel (all figures US$). Wheat on a continuous chart fell 2.2 per cent for the week, snapping a streak of seven straight weekly gains.
CBOT May soybeans tumbled 24-3/4 cents to $10.39-1/4 per bushel, bringing their weekly decline to roughly three per cent, the biggest such drop since August.
CBOT May corn eased three cents to $3.90-1/2 per bushel but eked out a weekly gain of about 1.6 per cent.
Commodity Futures Trading Commission data released after the close of trading showed speculative investors boosted long or bullish bets in corn and soybeans and trimmed their net short in wheat in the week that ended Tuesday.
The U.S. Department of Agriculture in a monthly supply and demand report on Thursday cut projected U.S. corn stocks by more than expected on the back of healthy exports and ethanol demand.
USDA raised its outlook for global wheat inventory at the end of 2017–18 to a record. High world supplies were countering support from drought in parts of the Plains.
“People are digesting the USDA report,” Alexandre Boy of consultancy Agritel said. “There weren’t a lot of surprises in wheat but it was slightly bearish with the increase in Russian exports that transferred extra stocks to the U.S. and EU.”
USDA data also dampened the soybean market as an upward revision to U.S. stocks reflected, as in wheat, a reduction in U.S. exports.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago; additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris.