Chicago | Reuters –– U.S. wheat futures sank to multi-year lows on Friday, pressured by an ample global stockpile that was expected to grow even larger due to a bountiful harvest, traders said.
Corn and soybean futures also weakened, with soybeans settling back from a rally on Thursday that pushed prices to a two-week high.
The U.S. Agriculture Department’s acreage report from Thursday, which showed a surprise bump in corn and spring wheat acreage, continued to cast a shadow over the grains market.
“The market is back to trading fundamentals,” said Greg Grow, director of agribusiness at Archer Financial Services. “The acreage increase in corn was unexpected, the acreage increase in spring wheat was unexpected. The world is well supplied in feed grains right now.”
The front-month Chicago Board of Trade soft red winter wheat contract shed 3.5 per cent to a nine-year low while K.C. hard red winter wheat touched a fresh 10-year low.
Forecasts for benign weather across much of the U.S. Midwest during the next few weeks — a key time for corn development — also weighed on prices.
“Highs warm into the mid- to upper 90s F for the far southern/western Midwest next Wednesday to Friday, but the rain ahead of this event will recharge soil moisture and lessen stress to pollinating corn,” Commodity Weather Group said in a note to clients.
Private analytics firm Informa Economics forecast U.S. corn production at 14.531 billion bushels and soybean production at 3.89 billion bushels. Both estimates were above the current USDA outlook.
CBOT soft red winter wheat for September delivery settled down 15-1/4 cents at $4.30-1/4 a bushel, K.C. September hard red winter wheat was 11 cents lower at $4.11-1/2 a bushel and MGEX September spring wheat was down 9 cents at $4.99-1/4 a bushel (all figures US$).
CBOT December corn was off 4-1/4 cents at $3.67 a bushel. CBOT November soybeans were down 15-3/4 cents at $11.37-1/2 a bushel.
For the week, CBOT soft red winter wheat was down 7.7 per cent, its biggest weekly decline in two years. K.C. wheat was off 6.7 per cent, its fourth straight weekly loss.
CBOT corn fell 4.5 per cent this week and soybeans were up 5.5 per cent, their biggest weekly gain since October 2014.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.