U.S. grains: Wheat falls to contract lows on technical selling

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters –– U.S. wheat futures fell to contract lows on Tuesday as technical selling pressure dragged prices lower for a fifth straight session.

Chart-based selling accelerated as prices slipped below the prior day’s two-month low, more than offsetting supportive news of a large export sale to Iraq and a government report showing the already planted U.S. winter wheat crop was in poorer shape than expected.

“This drop (in wheat) is more technical in nature than anything in the news,” said Jim Gerlach, president of A/C Trading.

“We’re down even though we had an export announcement and a lower-than-expected first rating report,” Gerlach said, citing two supportive fundamental factors.

Corn followed wheat downward as harvesting of a bumper U.S. crop progressed, while soybeans ended near unchanged.

The U.S. Department of Agriculture (USDA) on Tuesday confirmed private sales of 100,000 tonnes of hard red winter wheat to Iraq.

On Monday, the department said 52 per cent of the U.S. wheat crop was in good to excellent condition as of Sunday, well behind market forecasts.

Actively traded Chicago Board Of Trade December wheat fell 6-1/4 cents, or 1.4 per cent, to $4.18-1/2 a bushel after hitting a contract low of $4.16-1/4 (all figures US$). The December 2017 through March 2019 contracts all posted new contract lows.

December K.C. hard red winter wheat hit a contract low of $4.13-1/2 a bushel and settled down 5-1/4 cents, or 1.2 per cent, at $4.16-1/2 a bushel. December 2017 to May 2019 all posted new contract lows.

CBOT December corn fell 3 cents, or 0.9 per cent, to $3.45-3/4 a bushel, a one-week low.

January soybeans gained 1/4 cent to $9.84-3/4 a bushel and held support at its 200-day moving average around $9.81-1/2.

USDA said 54 per cent of the corn crop was harvested as of Sunday, ahead of market expectations, while 83 per cent of the soybean crop has been harvested, in line with analysts’ expectations.

Reporting for Reuters by Karl Plume in Chicago; additional reporting by Colin Packham in Sydney and Sybille de La Hamaide in Paris.

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