U.S. grains: Wheat, soy fall on fund liquidation, better weather

Chicago | Reuters — U.S. soybeans and wheat fell on Wednesday, pressured by investment fund selling tied to outlooks for drier weather in the U.S. and reduced export demand.

Corn futures reversed from earlier losses to finish narrowly higher as midday weather outlooks predicted hot temperatures that could stress plants during the crucial pollination phase.

China’s stock indexes were down three per cent or more, giving some investors caution about a downturn in demand from the top importer of many commodities including soybeans.

“The Shanghai market is really calling the shots today,” said Mike Zuzolo, analyst at Global Commodity Analytics.

China’s economy grew in the second quarter but volatile stock markets took a sharp dive in a reminder of the threats to Beijing’s efforts to direct the economy out of a slowdown.

Some investors also were selling soybeans and buying corn, Zuzolo said. “That spread is really active,” he said.

Soybeans for August delivery fell 8-3/4 cents to $10.24-3/4 per bushel, finishing well above the session low of $10.14-1/4 (all figures US$). CBOT September corn was 3/4 cent higher at $4.29.

Meteorologists predicted warmer and drier conditions in the eastern half of the U.S. Midwest’s crop belt, where record rainfall left pools of water, reducing corn and soybean yield potential and damaging mature fields of soft red winter wheat.

“The forecasted shift to warmer and drier weather for the eastern Corn Belt suggests the bleeding has stopped as far as yield going down,” said Tom Fritz, analyst at EFG Group.

CBOT September wheat eased 4-1/2 cents to $5.66-1/2, trimming losses after earlier reaching a two-week low of $5.58-1/2.

Investment funds were said to have sold 7,000 soybean contracts and 3,000 wheat contracts, and were net buyers of 4,000 corn contracts.

Harvest progress in the U.S. and Europe was adding supply pressure at a time of large global stocks.

The U.S. winter wheat harvest was 65 per cent complete as of Sunday, up 10 points over the week, according to the U.S. Department of Agriculture.

Showers expected in the coming week in spring wheat belts in the northern U.S. and Canada could also benefit the later-developing crop, particularly in parched Canadian belts.

Michael Hirtzer reports on grain markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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