Chicago | Reuters — U.S. wheat futures fell two per cent to their lowest in nearly three weeks on Monday, weakening on technical sales after firming briefly during the overnight trading session.
Corn and soybean futures also dropped to multi-week lows, with traders noting some end-month liquidation by investment funds.
Both wheat and corn futures notched their third straight session of declines.
Wheat notched the biggest declines, with benign weather for crop development bolstering expectations that the upcoming harvest of the winter crop in the Northern Hemisphere will add to already ample supply.
“If you look at the weather, there just is not anything to hang your hat on on the friendly side,” Northstar Commodity Investment Co. chief analyst Mark Schultz said.
The most actively traded Chicago Board of Trade May soft red winter wheat contract ended down 9-1/4 cents at $4.38-3/4 a bushel (all figures US$). It hit its lowest since Feb. 7 during the session.
CBOT May wheat firmed overnight but turned lower after failing to hold support above its 30-day moving average. Losses accelerated after the contract dropped below its 40-day moving average before finding support near its 50-day moving average.
“It went down with ease so far today,” Schultz added. “That is probably the biggest concern.”
CBOT May corn futures settled down 2-1/2 cents at $3.68-1/4 a bushel, hitting their lowest since Feb. 1, while CBOT May soybeans dropped 2-1/4 cents at $10.22 a bushel, hitting their lowest since Jan. 12.
Funds were selling positions in the March contracts of all three commodities ahead of first delivery day on Tuesday, adding to the bearish tone hanging over the grains market.
Traders expected first-day soybean deliveries to range from 200 to 500 contracts, first-day corn deliveries between zero and 200 contracts and first-day wheat deliveries between zero and 400 contracts.
Declines were limited in the soybean market as farmers in Brazil have slowed sales of their record-large crop.
“Market chatter has been focused on the fact that Brazilian farmers have been more patient soybean sellers this season,” said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia. “Wet weather has also slowed loading at ports.”
Some end-of-day bargain buying also pushed soybeans to session highs just before the closing bell.
— Mark Weinraub is a Reuetrs correspondent covering grain markets from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.