Chicago | Reuters — Chicago Board of Trade wheat futures sank 1.4 per cent on Tuesday to their lowest in nearly six years, weighed down by huge global supplies and spillover weakness from falling crude oil, traders said.
The amply stocked supply chain also weighed on corn and soybean futures as the start of the harvest in key South American producers Brazil and Argentina promised to boost stocks even further.
“More grain is coming and probably flowing better than it has in the past,” said Jim Gerlach, president of A/C Trading. “I think you are just seeing a realization of what the fundamentals really are once you take some of the focus off of the macro markets.”
Corn and soybean futures had risen to multi-week highs in recent days as crude oil and equity markets rallied.
The recent gains have left the grains market ripe for a round of profit taking, traders said.
CBOT March soft red winter wheat settled down 10-1/2 cents at $4.48 a bushel, just above its all-time low of $4.47-1/2 hit during the session (all figures US$). The front-month contract bottomed out at its lowest on a continuous basis since June 2010.
Rains in the key growing areas of the U.S. were seen as beneficial to hard red winter wheat development in Oklahoma and Texas, adding pressure to the market.
“The rains in the southern U.S. Plains are driving wheat lower,” said Terry Reilly, analyst at Futures International.
CBOT March soybeans, which fell through key support levels at its 30-, 40-, 50- and 100-day moving averages, ended down 11-3/4 cents at $8.69-1/4 a bushel.
“The soybean price is likely to fall as soon as the shipment delays in Brazil abate and the soybean supply from the new crop reaches the world market,” Commerzbank analysts said in a note.
CBOT March corn was off 5-1/2 cents at $3.62 a bushel. March corn closed below its 30-, 40- and 50-day moving averages.
Market attention is turning toward spring planting of corn and soybeans in the U.S. The U.S. Department of Agriculture is due to issue acreage forecasts on Thursday at the start of its annual outlook forum.
— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Michael Hirtzer in Chicago, Naveen Thukral in Singapore and Gus Trompiz in Paris.