U.S. grains: Wheat lower on technicals, better weather

Chicago | Reuters — U.S. wheat futures fell to a one-week low on Monday on technical selling and an improving weather outlook, including beneficial moisture in parts of the Midwest winter wheat belt, analysts said.

Soybean futures set a two-week low on forecasts for much-needed moisture in parts of Argentina, and corn sagged as well.

Chicago Board of Trade March wheat settled down 6-1/2 cents at $4.40-1/4 per bushel (all figures US$). March soybeans were down nine cents at $9.69-3/4 a bushel and March corn was down 2-3/4 cent at $3.58-3/4 a bushel.

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All three commodities declined after the U.S. Commodity Futures Trading Commission’s weekly commitments report on Friday showed that funds had cut their net short positions in grains and soy aggressively, leaving the market open to a round of fresh short-selling.

The supplement to the CFTC’s weekly commitments report showed large speculators in the week to Jan. 30 slashed their net short position in CBOT wheat by about 48,000 contracts, in soybeans by about 62,000 contracts and in corn by about 101,000 contracts.

“The short-covering was far beyond what the daily indications would suggest,” said Tom Fritz, a partner with EFG Group in Chicago.

Also, storms this week should bring beneficial moisture to U.S. winter wheat areas, with snow in the Midwest and rain in the Southeast.

Soybean futures came under pressure from rains expected next week in dry areas of Argentina, the world’s No. 3 soybean grower and the No. 1 exporter of soybean meal, used as animal feed.

“I’m seeing rain this weekend and some showers between Thursday and Friday of next week,” said Eduardo Sierra, climate expert with the Buenos Aires Grains Exchange. “This would contain the damage.”

If the storms fail to materialize, Argentine soy production prospects would decline sharply, Sierra said.

CBOT corn futures found underlying support from export demand for U.S. corn. The U.S. Department of Agriculture reported export inspections of U.S. corn in the latest week at 1.07 million tonnes, slightly above a range of trade expectations.

But pressure stemmed from news over the weekend that China launched an anti-dumping and anti-subsidy investigation into U.S. sorghum imports. The move came less than two weeks after U.S. President Donald Trump slapped steep tariffs on imports of solar panels and washing machines.

“Is this the beginning of a trade war? That has cast a pall over the market,” Fritz said.

— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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