U.S. grains: Wheat ends week down four per cent

Soybean, corn futures firm

Chicago | Reuters — U.S. wheat futures fell on Friday and recorded their biggest weekly slide in a month, dragged down by rising global stockpiles and improving crop prospects in Europe that signal strong competition for export business, analysts said.

Soybean and corn futures closed modestly higher in rangebound trade.

Chicago Board of Trade July wheat settled down two cents at $5.00-1/4 per bushel (all figures US$). For the week, the contract fell 21-3/4 cents a bushel, about 4.2 per cent.

CBOT July soybeans ended up 1-1/2 cents on Friday at $8.38-1/2 a bushel, but posted a weekly decline of 12 cents, or 1.4 per cent. July corn settled Friday up 1-3/4 cents at $3.19-1/4 a bushel, and was unchanged on the week.

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July wheat dipped below psychological support at the $5 mark this week, pressured by expectations for global wheat production and stocks to rise in the 2020-21 crop year.

The U.S. Department of Agriculture this week projected that U.S. wheat exports would decline in 2020-21 from the previous year, while exports from Russia, Australia, Canada and Argentina would increase.

Meanwhile, much-needed showers have bolstered crop prospects in Europe, projected as the world’s No. 2 wheat supplier after Russia. The soft wheat crop in France had deteriorated in the week to May 11, with 55 per cent of crops rated good or excellent against 57 per cent a week earlier, farm office FranceAgriMer said.

“As long as there are rains in eastern Europe and some of the European wheat-growing areas like France, it will be hard for the U.S. market to gain its footing,” said Rob Hatchett, senior economist with Doane Advisory Services.

Soybean futures found support from news that U.S. soy processors crushed more of the oilseed than expected in April. The National Oilseed Processors Association (NOPA) said its members processed 171.754 million bushels of soybeans last month, just above an average of trade expectations for 170.483 million.

Strong production prospects for the U.S. corn and soybean crops currently being seeded hung over the futures markets, while traders also noted uncertainty about demand from top global soy buyer China, despite a pick-up in bookings of U.S. soybeans and corn this month.

“The market is looking for more signs of China stepping into the market and maybe building up some of their reserves,” Hatchett said.

China is set to speed up purchases of U.S. farm goods and will implement the Phase One trade deal signed in January with the United States, state-owned trading house COFCO said.

White House adviser Larry Kudlow said the Phase One trade deal “is continuing,” a day after President Donald Trump suggested he could cut ties with the world’s second-largest economy.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Colin Packham in Sydney and Sybille de La Hamaide in Paris.

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