Chicago | Reuters — U.S. wheat futures fell two per cent on Wednesday, retreating from a two-week high set in early moves, as concerns eased about cold-weather damage following a frigid weekend in the U.S. Plains, analysts said.
Corn futures firmed slightly, consolidating below multi-year highs established last week, and soybean futures closed mixed.
A stronger dollar hung over the markets, making U.S. grains less competitive globally. The dollar rose on upbeat economic data and signs of strengthening inflation.
Chicago Board of Trade March soft red winter wheat futures settled down 13-1/2 cents at $6.44 per bushel (all figures US$). March corn ended up 3/4 cent at $5.53 a bushel, while March soybeans finished down one cent at $13.83-3/4 a bushel, staying inside of Tuesday’s trading range.
Wheat was the biggest mover, declining as forecasts called for temperatures to moderate in the Plains winter wheat belt over the next two weeks. Some traders believe that so-called winterkill damage over the weekend was likely limited to a few areas that lacked adequate snowfall, which can insulate crops from severe cold.
“It would have to be the northern half of Kansas, maybe into part of Nebraska, before you find problems with winter wheat, if there was any winterkill,” said Mark Schultz, analyst with Northstar Commodity.
The extent of freeze damage to winter wheat is difficult to assess until the dormant crop resumes growth in the spring, several analysts noted.
Corn futures edged higher and nearby soybean contracts ticked lower in a choppy session as the market sought fresh direction. Traders await U.S. acreage and usage forecasts expected from the U.S. Department of Agriculture’s annual two-day outlook forum, which starts on Thursday.
In South America, more rainfall is expected in parts of Brazil in the week ahead, but soy harvesting was still expected to progress, while showers could ease dryness in Argentina.
“We’re having a bit of a breather in the market while we see a window in South American weather that’s more conducive for crops,” said Michael Magdovitz, commodity analyst at Rabobank.
— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.