U.S. grains: Wheat, corn hit two-week lows on long liquidation

Chicago | Reuters — U.S. wheat futures fell to a two-week low on Friday and corn hit a 2-1/2-week low on technical selling including fund long liquidation, analysts said.

Soybeans closed modestly higher, bouncing after the spot March contract hit a six-week low.

Chicago Board of Trade March wheat settled down 6-3/4 cents at $4.31-1/4 per bushel after dipping to $4.30, its lowest since Feb. 9 (all figures US$).

CBOT March corn ended down 1-1/2 cents at $3.64 a bushel. March soybeans finished up two cents at $10.13-1/2 a bushel, rebounding after falling to $10.09-1/4, its lowest since Jan. 12.

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Funds appeared to be trimming big net long, or bought, positions built up in recent weeks. Weekly data from the U.S. Commodity Futures Trading Commission showed non-commercial traders in the week to Feb. 14 built their biggest net long since July in corn, and the second-biggest since July in soybeans.

“You’ve got some nervous longs. As you violate some technical signals, you’ve got the potential for some further liquidation,” said Terry Linn, analyst with Linn & Associates, a Chicago brokerage.

Open interest in CBOT corn plunged by more than 29,000 contracts and by more than 22,000 contracts in soybeans on Thursday as futures declined, an indication of traders exiting long positions.

Wheat made the biggest move on a percentage basis on Friday, pressed by bearish fundamentals including hefty global supplies and a forecast for a bumper harvest in Argentina.

Also, U.S. wheat is being priced out of the global export market after a three-month climb in CBOT futures and stiff competition for business following a record global harvest.

U.S. crop production and usage forecasts released by the U.S. Department of Agriculture offered few market-moving surprises.

The government projected a seven per cent decline in U.S. corn production in the 2017-18 marketing year to 14.065 billion bushels, but ending stocks were expected to remain burdensome at more than two billion bushels.

For soybeans, USDA estimated the 2017-18 crop at 4.18 billion bushels, down three per cent from the previous year despite an expected increase in plantings, while ending stocks were seen flat at 420 million bushels.

“Trade is sorting through the USDA baseline data … but not really finding much worth basing trade decisions off of,” MaxYield Cooperative analyst Karl Setzer said in a note to clients.

— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Nigel Hunt in London and Colin Packham in Sydney.

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