U.S. grains: Wheat retreats from one-month high

Chicago | Reuters — U.S. wheat prices fell on Friday in a technical setback from a one-month high and a seven per cent surge a day earlier, traders said.

Corn and soybeans also eased as U.S. crop prospects remained bright amid generally favourable weather in the Midwest.

At the Chicago Board of Trade, July wheat settled down 3-1/4 cents at $5.11 a bushel. Still, after Thursday’s surge, the contract posted a weekly gain of about six per cent.

July corn fell 2-1/2 cents on Friday to settle at $3.65-1/2 a bushel and July soybeans ended down 3-3/4 cents at $9.53-1/4 a bushel (all figures US$).

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For the week, corn rose 0.7 per cent and soybeans fell 2.3 per cent.

Wheat futures declined after surging a day earlier on fund short-covering, a weaker dollar and fears of excessive rains in the southern Plains wheat belt that are forecast to continue next week. Commodity funds hold a massive net short position in CBOT wheat.

“It’s a little correction from yesterday’s rally. Yesterday was a short-covering event in wheat. We can look for reasons, but really it was about market structure and technicals,” said Austin Damiani, a broker with Frontier Futures in Minneapolis.

Traders also noted the prospect of increased competition from the Black Sea region. Russia lifted its duty on wheat exports, and the government said the move would boost overseas sales by one million tonnes.

Russian exporters will pay no fees for selling wheat abroad from Friday until the introduction of a new export duty, calculated under a different formula, from July 1.

CBOT soybeans fell on prospects for rising U.S. and world supplies, shrugging off supportive monthly U.S. crushing data.

The National Oilseed Processors Association said its members crushed 150.363 million bushels of soybeans in April, the most ever for the month. The figure topped an average of analyst estimates for 147.8 million bushels.

“We already know we’ve got a big crush, and we know we’ve got the beans to do it,” said Tom Fritz, a partner with EFG Group in Chicago, alluding to the record-large U.S. 2014 harvest.

Corn futures were lower in sympathy with wheat and soybeans, halting a modest three-day advance. Traders were monitoring forecasts for possible frost next week in North Dakota and Minnesota that could threaten newly planted corn.

Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Nigel Hunt in London and Naveen Thukral in Singapore.

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