Chicago | Reuters — Chicago wheat futures dropped to a 2-1/2-week low on Friday on outlooks for rains by this weekend that should alleviate stress on some crops in the parched U.S. Plains growing region, traders said.
CBOT May contract wheat settled down 11 cents at $4.67-3/4 per bushel, bringing the losses for the week to more than six per cent — the biggest weekly decline since August.
“They really increased rain chances from yesterday, through overnight and into the morning hours,” Midwest Marketing Solutions analyst Brian Hoops said of the weather forecast.
Wheat had fallen below several moving averages on Thursday, triggering selling.
“There’s bearish fundamentals and bearish technical action,” Hoops added.
Rains on Sunday and Monday will benefit the northeastern half of the Plains wheat belt but will likely miss the main drought areas in southern Kansas and Oklahoma, according to meteorologists and analysts.
At the same time, favourable weather ahead of spring grain sowing in Black Sea producers Russia and Ukraine is bolstering the chances of another large wheat harvest due to good levels of soil moisture, analysts and industry officials said.
“As far as the Black Sea production looks good, buyers are not too worried about U.S. drought,” said one Singapore-based trader who sells wheat to millers across Southeast Asia. “Mills are not going to chase a rally in prices at this stage.”
CBOT May corn settled down four cents at $3.82-3/4 per bushel, the lowest since March 1. Corn largely tracked losses in wheat in relatively light trading volume.
CBOT May soybeans settled up 8-3/4 cents at $10.49-1/2 per bushel, rising for the second straight session on fund buying linked to expectations of a smaller soy and corn harvest in Argentina due to drought.
The Commodity Futures Trading Commission after the close of trading on Friday said speculative investors as of Tuesday slightly cut their net long in soybean futures and increased their corn net long.
The Rosario Grains Exchange on Thursday cut its estimate of Argentina’s soy harvest to 40 million bushels from 46.5 million previously.
That was also well below the 47 million tonnes forecast by the U.S. Department of Agriculture (USDA) this month.
— Michael Hirtzer reports on commodity markets for Reuters from Chicago; additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris.