U.S. grains: Wheat slumps on record-large export cancellations

Chicago | Reuters –– U.S. wheat fell as much as two per cent on Thursday, capping its second straight monthly decline on pressure from improving crop conditions in the southern U.S. Plains and disappointing weekly export sales.

Corn and soybeans also were lower at the Chicago Board of Trade, weighed down by favourable weather for U.S. plantings and offsetting support from a weaker dollar that could improve export prospects.

The U.S. Department of Agriculture earlier said weekly exports of all wheat varieties were a net cancellation of 449,167 tonnes for the current marketing season, the largest such cancellation in USDA records going back to 1990.

Cheaper supplies shipped out of Europe, Ukraine and Russia continued to dominate international markets while buyers of U.S. wheat also switched some of their canceled purchases to the next marketing season that begins on June 1.

Deliveries against May wheat contracts, an indication of weak cash markets, also were bearish for futures.

“Given that U.S. prices for wheat are very uncompetitive and people are trying to deliver against Chicago, Kansas City and Minneapolis (futures), it goes to show you that export demand for spot shipments is nonexistent,” said Futures International analyst Terry Reilly.

Front-month CBOT May wheat finished down 10-1/4 cents at $4.67 per bushel, an outside day on the charts with wheat on a continuous chart holding just above its nearly five-year low reached on Tuesday (all figures US$).

CBOT May corn settled 1-1/4 cents lower at $3.62-1/2 per bushel and CBOT May soybeans off 10 cents to $9.78-1/2. Bear spreading was noted in corn, with expectations that farmers will rapidly plant seeds pressuring the new-crop December contract.

Wheat and corn each lost ground for the second consecutive month in April while soybeans gained about 0.7 per cent for the month. The commodities eased for the day even as the dollar touched a fresh nine-week low, a factor that helped buoy grain prices in the previous session.

“We’re more focused on grain fundamentals right now — the aggressive planting is winning out,” said Allendale Inc. analyst Rich Nelson.

Michael Hirtzer reports on grain markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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