Chicago | Reuters — U.S. wheat futures fell two per cent on Tuesday, their fifth decline in the last six sessions, as investment funds cut their risk exposure to the grain following a surprise short-covering rally on Monday, traders said.
Poor demand for U.S. wheat exports amid expectations of a jump in winter wheat plantings in the U.S. Plains added to the bearish tone.
“In spite of all this world production decline talk, we are still not seeing any exports come to the United States,” said Dan O’Bryan, risk management specialist and broker at Top Third Ag Marketing. “The story is not panning out. “Russia is still grabbing the lion’s share of the business.”
Export concerns, highlighted by a fresh cancellation of a deal for U.S. supplies, also weighed on the soybean market while corn was close to unchanged. Soybeans hit their lowest since Aug. 31, settling just above session lows.
Traders squared positions ahead of a key U.S. Agriculture Department report on Wednesday that will provide the government’s latest estimate of the size of the upcoming U.S. corn and soybean harvests.
Chicago Board of Trade December soft red winter wheat futures ended down 9-1/2 cents at $5.18-3/4 a bushel (all figures US$).
Ukraine increased its 2018 grain harvest forecast to 63.1 million tonnes from a previous estimate of at least 60 million tonnes, the acting agriculture minister said on Tuesday. The country expects grain exports will rise to 42 million tonnes in the 2018-19 marketing year.
Egypt, the world’s top buyer of wheat, issued a tender for fresh supplies after the close. Russia has consistently won Egypt’s business in recent weeks.
“After the bad harvests in the Black Sea, EU and Australia the question is still about when world export demand will be transferred to the United States,” said Matt Ammermann, commodity risk manager with INTL FCStone. “The market is still waiting for signs of larger U.S. wheat exports.”
CBOT November soybean futures were down 13-1/2 cents at $8.31-3/4 a bushel.
USDA on Tuesday morning said private exporters reported the cancellation of sales of 192,000 tonnes of soybeans for delivery to unknown destinations during the 2018-19 marketing year.
CBOT December corn was off 1/2 cent at $3.66-3/4 a bushel.
Analysts were expecting USDA to trim its estimate of U.S. corn yields on Wednesday but the harvest outlook would still forecast a bumper crop.
— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.