CBOT wheat, corn end lower, soy higher

(Oct. 26) U.S. wheat futures fell Friday on end-of-week positioning and weak export demand, traders said.

The benchmark Chicago Board of Trade December soft red winter wheat contract fell nearly 1 per cent, dropping through key technical support at its 30-day moving average.

For the week, CBOT December wheat fell 0.9 per cent.

Ukraine wheat exports rose to 1.4 million tonnes in the Oct. 1-25 period, up from 1.3 million in September, the Farm Ministry said. Traders said exporters were stepping up their pace ahead of the government’s ban on wheat exports.

Britain will be a net importer of wheat for the first time in a decade this year after a disease-ravaged harvest, much of which fails to meet the quality required for bread.

Russian farmers had harvested 39.6 million tonnes of wheat by Oct. 23 with the harvest 99 per cent complete, representing a
32.5 per cent decline from a year earlier, Agriculture Ministry data showed.

Chicago Board of Trade corn futures were lower on waning export demand for U.S. corn and on signs of slowing demand from the livestock and poultry feeding sectors, traders said.

Declines were slowed by end-user bargain buying at the lower price levels and on post-harvest buying as the U.S. 2012 corn harvest winds down.

Drier weather beginning this weekend and extending through early next week will boost harvest progress for the U.S. corn and soybean crops, an agricultural meteorologist said on Friday.

"They will catch a break, it will be drier and will certainly allow good harvest of the remnants of each crop," said Don Keeney, meteorologist for MDA EarthSat Weather.

U.S. Gulf cash basis bids for corn were mostly steady to firm on Friday with movement on rivers slow, traders said.

Key resistance for the December contract is at its 50-day moving average of $7.69-1/4 and key support is at the 100-day moving average of $7.34-1/2. The nine-day relative strength index is at 40.

U.S. soybeans slipped for a second straight day on signs of waning U.S. exports and improving crop weather prospects in South America that could lead to bumper output in Brazil and Argentina.

Corn fell for the fifth day in a row on slow U.S. exports and declining demand for domestic feed use and wheat fell despite concerns about dry weather stress on the hard red winter wheat crop in the U.S. Great Plains.

"Corn and wheat were technically weak. There just isn’t anything fundamentally supportive right now and when early gains couldn’t hold, they took profits heading into the weekend," said Shawn McCambridge, analyst for Jefferies Bache Commodities.

Chicago Board of Trade November soybeans were down 2-3/4 cents per bushel at $15.61-1/4. December corn was down 4-1/4 cents at $7.37-3/4 and December wheat was down 9 at $8.63-3/4.

Wheat ended down 1 per cent for the week, corn was down 3 per cent and soybeans ended the week up 1.7 per cent.

Corn drew little buying interest and pressure remained on corn and also on soybeans because of lingering bearishness from the release on Thursday of the U.S. Department of Agriculture’s (USDA) weekly export sales report.

The worst U.S. drought in half a century drove prices to historic highs this summer and there are signs demand is waning as end-users back away from the market due to poor profits.

The USDA said corn sales totalled 142,400 tonnes, below estimates for 150,000 to 250,000. Soybean sales were also lower than expected at 522,200, versus estimates of 650,000 to 850,000 tonnes.

"U.S. soybean exports were pretty low and you are looking at a big rebound in South American supplies," said Brett Cooper, a senior markets manager at INTL FCStone Australia.

The market expects a bumper South American soybean crop with improving weather prospects for November seedings.

Improved crop weather seen early on Friday in Argentina and Brazil should boost plantings and emergence of corn and soybeans, said Don Keeney, meteorologist for MDA EarthSat Weather.

"The six- to 10-day (forecast) is for drier weather in central Argentina so all of Argentina will catch a break," he said.

Excessive wet weather has been slowing fieldwork in Argentina, and dry weather has been an issue in portions of Brazil. Now, it appears Brazil may receive some timely rains.

"The six- to 10-day is wetter for central and northern Brazil where rain is needed so this will certainly improve planting prospects," Keeney said.

U.S. plains dryness alarming

The wheat market, while ending lower, is finding some underpinning from prospects of lower global supplies as dry weather hurts production in Australia and the U.S. Plains suffer from lack of moisture for winter wheat planting and emergence.

Many areas of the drought-stricken United States continued to see improvement over the last week as steady rains started recharging parched soils, but for key agricultural areas of the U.S. heartland, there was little relief, a climatology report issued on Thursday showed.

Mostly dry weather in the U.S. Plains hard red winter wheat region over the next week will lead to renewed concerns about drought stress on the crop, Keeney said.

"There is light snow now in eastern Colorado and western Kansas, then it turns dry by the weekend through early next week," he said.

"There certainly will be no improvement and it will turn very cold with temperatures in the 20s (Fahrenheit) which will burn back the crop," Keeney said.

USDA on Monday said 81 per cent of the U.S. winter wheat crop had been planted, up slightly from the 80 per cent five-year average. But emergence of the crop was lagging the average pace.

USDA said 49 per cent of the crop had emerged, below the 56 per cent five-year average.

Wheat traders in Europe said there was little fresh news to influence prices.

In Paris, November milling wheat was up 0.67 per cent at 264.50 euros a tonne, steadying after a wave of selling on Thursday that saw open interest tumble by about 40 per cent.

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