Chicago | Reuters –– U.S. wheat eased on Friday to the lowest in nearly three months, capping the futures’ biggest monthly decline in almost three years as improving weather for crops kept the market focused on comfortable global supply.
Corn fell also fell to a roughly three-month low while soybeans declined on favourable weather forecasts for final spring sowings and for early crop development in the U.S.
“Generally, the weather for growing conditions is excellent in most areas,” said Sterling Smith, futures strategist at Citigroup in Chicago. “If you draw a line from central Nebraska to central Ohio, there’s a good mix of rain and sunshine for the next several days.”
Wheat was also pressured by cheaper supplies elsewhere in the world. The U.S. Agriculture Department showed exports of wheat last week at a net cancellation of 52,400 tonnes for the current marketing season, below analysts’ expectations.
“We are pretty noncompetitive globally,” Smith said of U.S. wheat prices.
Benchmark Chicago Board of Trade July wheat fell 5-1/4 cents to $6.27-1/4 per bushel, the lowest since March 4 (all figures US$). Wheat fell about 12 per cent for the month for the largest such decline since September 2011.
July corn eased from earlier gains to shed 3-3/4 cents at $4.65-3/4 per bushel, lowest since Feb. 28. Futures snapped a six-month streak of monthly gains for the largest monthly decline since September of last year.
“The U.S. market is still under the pressure of the improving weather conditions which enable farmers to end corn sowing. The wheat crops are benefiting from rains which favour their development,” French consultancy Agritel said in a note.
The improved crop conditions in the U.S. come as countries such as Ukraine and Russia have undercut U.S. shippers in international markets, despite concern that tensions between the two countries would disrupt grain trade.
“There is hardly any purchase of U.S. wheat at these levels so there is potential for more downside in wheat prices,” said Kaname Gokon, general manager of research at brokerage Okato Shoji in Tokyo. “We might see the price fall below $6.30 and then $6 a bushel in June.”
Soybeans edged lower as the market continued to weigh up tight old-crop supply against prospects for large U.S. and global production this year.
CBOT July soybeans were 5-3/4 cents lower at $14.93-1/4 per bushel. Soy lost 2.5 per cent for the month, the first monthly decline in four months.
— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Gus Trompiz in Paris and Naveen Thukral in Singapore.