U.S. Grains: Profit taking pulls U.S. wheat lower, soy sags

U.S. wheat futures fell 3.5 per cent on Friday, stepping back from their highest in more than six months on a round of profit-taking ahead of a holiday-shortened week, traders said.

The drop in wheat weighed on corn, but signs of strong export demand limited selling in the yellow grain. Soybeans also were weak on forecasts for crop-boosting rain in South America.

Wheat’s decline snapped a six-session winning streak for the benchmark Chicago Board of Trade March soft red winter wheat contract that stemmed from concerns about a slowdown in Russian exports.

“This was not a surprise,” said Terry Reilly, analyst at Futures International. “I think some of these long traders tha do not like to carry positions over the weekend really took advantage of profit taking today.”

CBOT March soft red winter wheat ended down 23 cents at $6.32-1/4 a bushel. Prices rose 4.5 per cent this week. The front-month wheat contract has posted gains for four straight weeks.

Thin volume exacerbated the decline, which was the biggest daily drop for front-month CBOT wheat since early September Traders and analysts said the market had already priced in slower Russian exports.

“The market ran ahead of itself yesterday so it makes sense to cool off a bit,” a European trader said. “With the year-end holidays plus the usual winter logistical slowdown in Russia, we’re going to have wait until early next year to see if export demand shifts to other origins.”

CBOT January soybeans were 4-1/2 cents lower at $10.30-1/2 a bushel. The front-month contract shed 1.6 percent this week. Commodity Weather Group forecast on Friday that showers this weekend in key soy- and corn growing areas of Argentina should ease concerns about dryness there. Rain was expected to pick up in Brazil crop areas early next week.

CBOT March corn futures were 1/2 cent lower at $4.10-1/2 a bushel. Prices traded in a narrow 10-cent range all week but the front-month contract posted a 3.7 percent gain.

The U.S. Agriculture Department on Friday morning reported that private exporters booked sales of 237,268 tonnes of corn in two separate deals. It was the second day in a row the government has announced flash sales of corn.

Name                 Last       Pct     Net       Pvs Close
                                 Change  Change    
 CORN MAR5                410.5   -0.12      -0.5         411
 SOYBEANS JAN5           1030.5   -0.43      -4.5        1035
 SOY MEAL JAN5            363.5   -0.49      -1.8       365.3
 SOYBEAN OIL JAN5         31.97    0.25      0.08       31.89
 WHEAT SRW MAR5          632.25   -3.51       -23      655.25
 ROUGH RICE JAN5          12.31    1.65       0.2       12.11
 M.WHEAT EUR MAR5         197.5   -1.86     -3.75      201.25
 LIGHT CRUDE JAN5         56.91    4.45      2.41       54.11
 DJ INDU AVERAGE       17859.13    0.46     80.98    17778.15
 GOLD LBMA               1195.3  #N/A       -2.35     1197.65
 BALTIC EXCH DRY            803   -1.35       -11         814
 US DOLLAR INDEX         89.615    0.43      0.38      89.235
 In U.S. cents, benchmark contracts, except EU wheat (euros) and
soymeal (dollars).