Winnipeg | Reuters — Chicago wheat fell on Monday to a three-month low, as commodity and equity markets dropped on concern about the impact of rare protests in China against its strict anti-COVID-19 policy.
Cheap supplies from Russia and elsewhere in the Black Sea are adding competition for U.S. wheat, and prices have slipped to levels low enough to spur technical selling, analysts and traders said.
Chicago Board of Trade most-active wheat fell two per cent to $7.80-3/4 a bushel, after earlier hitting $7.73-1/4, its lowest since Aug. 22 (all figures US$).
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Funds were likely extending short positions with wheat prices so low, and modest precipitation last week in parts of Texas and Oklahoma may have improved winter wheat growing conditions, said Terry Reilly, senior commodity analyst at Futures International.
Corn ended mixed, and spread trades involving simultaneous purchases of corn and sales of wheat may have underpinned the grain, Reilly said.
Soybeans gained 1.5 per cent to settle at $14.57-1/4 a bushel, supported by U.S. Department of Agriculture’s report of an export sale of 110,000 tonnes to unknown destinations.
A spike in soyoil prices mid-session also pulled soybeans up. Those gains were related to bullish expectations for the U.S. Environmental Protection Agency’s annual setting of renewable volume obligations for transportation fuel, said Mike Zuzolo, president of Global Commodity Analytics.
Zuzolo said dry weather in central-west Brazil added soybean support.
Global markets including crude oil and equities fell on Monday as widespread and rare protests in China against stringent COVID-19 curbs sparked a wave of selling on concerns about growth expectations.
Competition for U.S. wheat is also hitting prices, said Matt Ammermann, StoneX commodity risk manager.
“Russian wheat continues to be offered at about the cheapest prices in world export markets which is negative for the export prospects of U.S. wheat,” Ammermann said.
“Weather remains positive for export shipping in the Black Sea and we could see large volumes of Russian wheat shipments in December.”
Russian and Ukrainian wheat were bought by Egypt on Thursday.
— Reporting for Reuters by Rod Nickel in Winnipeg and Michael Hogan in Hamburg; additional reporting by Naveen Thukral in Singapore.
