U.S. wheat futures fell on Monday, with the benchmark Chicago Board of Trade (CBOT) contract shedding 2.3 per cent to drop below US$7 a bushel for the first time since June, as storms in the U.S. Plains boosted harvest prospects.
Snow and a snow-rain mix was blanketing nearly all of the U.S. Plains hard red winter wheat region, bringing welcome
"It will certainly be enough moisture now to get the crop growing when it breaks dormancy. More will be needed in April and May, for now it’s a big help," said John Dee, meteorologist for Global Weather Monitoring.
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Soybean futures also dropped, due to the ongoing harvest of a large crop in South America. Soybeans closed well above session lows as bargain buyers stepped into the market when prices dipped below key technical markers.
Corn bucked the overall bearish trend in the grain markets, edging higher as recent weakness has led to tightness in supplies on the cash market.
CBOT March soft red winter wheat futures ended down 15-3/4 cents at $6.99-1/4 a bushel. Prices bottomed out at $6.98, the lowest for the front-month contract since June 25 (all figures US$).
Kansas City Board of Trade hard red winter wheat futures were trading at their lowest level since late June.
"Wheat remains the bear, pressured again this week by another potentially crucial precipitation event for the southern Plains," Matt Zeller, director of research at INTL FCStone, said in a research note to clients.
CBOT March soybeans were 10 cents lower at $14.51-1/4 a bushel. Prices for the benchmark contract fell below the 200- and 100-day moving averages during the session. The market also briefly dropped below the 30-day moving average but late buying pulled prices above that key technical level by the close.
"We are starting to see some South American pressure," said Karl Setzer, a commodity trading adviser and market analyst at MaxYield Cooperative. "Harvest in Brazil is at 30 per cent which is when we tend to start to see more of their soybeans enter the global market."
CBOT March corn ended up 4-3/4 cents at $6.95 a bushel.
"I think they’re having a very tough time in the country buying farmer corn," said Shawn McCambridge, analyst for Jefferies Bache. "Much of the fund long position has come out of the market so it’s a pretty fundamental market right now."
Spot March corn has fallen more than 50 cents per bushel this month and the nine-day relative strength index showed oversold signals on Friday, dropping below the benchmark 30 level.
The U.S. Agriculture Department on Monday said that private exporters reported the sale of 127,000 tonnes of U.S. corn to unknown destinations. The deals include both new-crop and old-crop supplies.
CBOT wheat futures have fallen for five weeks in a row, shedding 9.6 per cent of their value during that time.
Global Weather Monitoring’s Dee said roughly a foot of snow would fall Monday and Tuesday in nearly all of Kansas, the largest wheat-producing state in the United States, and rain mixed with snow would bring about 0.5 inch to one inch of moisture to most of the Plains.
The storm, following a similar storm last week, will help boost winter wheat prospects and add valuable soil moisture ahead of spring planting of corn and soybeans.
— Mark Weinraub is a Reuters correspondent covering the grain futures markets from Chicago. Additional reporting for Reuters by Sam Nelson.
