U.S. grains: Wheat prices fall on hefty supplies

Chicago | Reuters — U.S. wheat fell for the second straight day on Thursday, pressured by technical selling, ample global supplies and lacklustre demand for U.S. shipments and dragged by Paris futures which hit a contract low early in the session.

Chicago Board of Trade wheat futures extended declines after Euronext March milling wheat tumbled to a contract low of 166.25 euros (C$259) a tonne. CBOT corn was about flat while soybeans touched a three-week high.

CBOT March wheat settled 9-1/4 cents lower at $4.68-3/4 per bushel (all CBOT figures US$). The two-day decline of 2.6 per cent was the biggest since mid-December and the losses came after the contract hit a 2-1/2 week high in the previous session.

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Prices rose earlier this week after the U.S. Department of Agriculture surprised investors with its forecast for the second lowest U.S. winter wheat plantings since 1913. However, USDA also said Russia this year will overtake the U.S. as the world’s top wheat exporter for the first time in the agency’s records going back to 1960.

“You look at world competition for export share in the wheat market, and it’s pretty intense. It’s almost like having a price war,” said Tom Fritz, analyst at brokerage EFG Group in Chicago.

Chicago wheat also failed to surpass the session highs reached early on Tuesday, sparking a wave of technical selling. The market remained volatile, and prone to possible short covering, as regulatory data showed speculative investors with a record net short, or bearish, position.

“The market is realizing that even after the USDA (sowing) report there is still a large amount of wheat in the world and it will take time to absorb those stocks,” Capital Economics commodities analyst Hamish Smith said.

CBOT soybeans for March delivery rose to the highest since Dec. 24, gaining after the release at mid-morning of USDA’s weekly export sales showing soybean sales of 1.3 million tonnes last week, the largest volumes in three weeks, largely to top importer China.

CBOT March soy finished 2-1/4 cents higher at $8.82-1/4 while CBOT March corn was flat at $3.58.

“Corn traded both sides of unchanged today in lackluster fashion, without much in terms of fresh news,” ED+F Man Capital analyst Charlie Sernatinger said in a note to clients.

Michael Hirtzer reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Colin Packham in Sydney and Gus Trompiz in Paris.

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