Chicago | Reuters — U.S. wheat futures sagged on Tuesday, with the K.C. hard red winter wheat market hitting its lowest in nearly five months on fund-driven long liquidation and pressure from the harvest in the southern Plains, traders said.
Soybeans were also lower while corn ended modestly higher as traders awaited key U.S. Department of Agriculture reports due later this week.
Chicago Board of Trade September soft red winter wheat settled down 7-1/2 cents at $4.83 per bushel and K.C. September hard red winter wheat ended down 12 cents at $4.75-1/2 (all figures US$).
The spot K.C. July contract, which is nearing its delivery period, dipped to $4.54, the lowest spot price on a continuous chart since Jan. 29.
Commodity funds hold a net long position in K.C. wheat, leaving the market prone to bouts of long liquidation. Also, the U.S. winter wheat harvest is more than halfway complete in Kansas, the biggest U.S. producer, where farmers planted the second-smallest number of wheat acres since 1957.
“At this point, we are just putting in the normal harvest lows. It’s not weather, it’s not the yields. It’s the fact that we’re closing in on 50 per cent of the harvest, so it’s normal that the price goes lower and reflects that,” said Don Roose, president of Iowa-based U.S. Commodities.
The U.S. Department of Agriculture late Monday said the U.S. winter wheat harvest was 41 per cent complete while the Kansas harvest was 52 per cent finished, ahead of the state’s five-year average of 32 per cent.
Others noted softening wheat prices in Russia, the world’s top exporter, and a stronger U.S. dollar, which tends to make U.S. grain less competitive globally.
Egypt’s state grain buyer, the General Authority for Supply Commodities (GASC), on Tuesday bought 120,000 tonnes of Russian wheat in an international tender.
CBOT soybean futures fell on favorable weather in the U.S. Midwest that has bolstered supply prospects, and concern about the impact of the U.S.-China trade war.
USDA late Monday rated 73 per cent of the U.S. soybean crop in good-to-excellent condition, its highest rating for this time of year in records dating to the mid-1980s.
“There was some hope that we might have some firmer price action today, but the crop condition ratings have been pretty strong,” said Jack Scoville, analyst with the Price Futures Group in Chicago.
CBOT benchmark November soybeans settled down eight cents at $8.87-1/2 a bushel while September corn finished up 1-3/4 cents at $3.61-1/4 a bushel.
Traders have started to adjust positions ahead of USDA’s acreage and quarterly stocks reports on Friday. Analysts surveyed by Reuters on average expected the government to raise its U.S. corn and soybean plantings estimates from the forecasts USDA released in March.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.