U.S. grains: Wheat down on global supplies, seasonal pressure

Chicago | Reuters –– U.S. wheat futures fell more than two per cent on Monday on chart-based selling, abundant global supplies and seasonal pressure from the approach of harvest, analysts said.

Corn futures followed wheat lower. Soybeans were firmer, but pared gains on a smaller-than-expected monthly U.S. soybean crush figure.

Chicago Board of Trade July wheat settled down 9-1/2 cents, or 2.2 per cent, at $4.23-1/4 per bushel after dipping to $4.21-1/2, its lowest since April 25 (all figures US$).

CBOT July corn ended down 3-1/4 cents at $3.67-3/4 a bushel while July soybeans rose 2-1/4 cents to close at $9.65-1/4 a bushel, snapping a three-session slide.

Wheat posted the day’s biggest move on a percentage basis. The July contract session high at $4.31 was below Friday’s low of $4.31-1/4 and formed a gap in the contract’s chart, a bearish technical signal.

“Wheat prices face seasonal and chart-related selling as harvest approaches in the southern (U.S. Plains) belt,” INTL FCStone chief commodities economist Arlan Suderman said in a note to clients.

“All the talk about lower planting in the United States and then storm damage have had limited impact on wheat supplies,” said Phin Ziebell, an agribusiness economist at National Australia Bank. “We don’t see much upside to prices as there are plenty of supplies.”

Corn followed wheat lower, pressured in part by improved U.S. weather in recent days that allowed for planting progress in the Midwest before showers return this week.

After the CBOT close, the U.S. Department of Agriculture said the U.S. corn crop was 71 per cent planted, just ahead of the five-year average of 70 per cent and above the average analyst estimate in a Reuters poll of 68 per cent.

“As long as it’s sunny and warm in Chicago, I think that puts a damper on corn prices,” said Terry Reilly, senior commodity analyst with Futures International.

USDA said soybean planting was 32 per cent complete, matching the five-year average and above the average expectation of 28 per cent in the Reuters poll.

CBOT soybeans got an early boost from a surge in the value of the Brazilian real, which tends to discourage Brazilian farmers from selling their dollar-denominated soybeans.

But soybeans pared gains on a smaller-than-expected monthly U.S. soybean crush figure.

The National Oilseed Processors Association said its members crushed 139.1 million bushels of soybeans in April, down from 153.06 million bushels in March. Analysts had been expecting an April crush of 145.7 million bushels, based on an average of estimates in a Reuters survey.

NOPA’s crush figure suggests USDA may make a downward revision to U.S. soy crush estimate for the 2016-17 marketing year, Reilly said.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Sybille de La Hamaide in Paris and Naveen Thukral in Singapore.

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