U.S. grains: Wheat falls to three-week low

Chicago | Reuters — U.S. wheat futures slumped for a second session on Friday, anchored by ample global supplies and after top importer Egypt canceled a tender for the second time this week.

Corn and soybeans also fell at the Chicago Board of Trade, with all three markets posting a weekly decline ahead of a U.S. Department of Agriculture supply and demand forecast due on Tuesday.

Rains were forecast to last through the weekend in Argentina, limiting yield loss in corn and soybean fields ahead of what were expected to be bumper crops.

Egypt earlier canceled a tender to buy wheat after receiving only four offers that were well above prices quoted in an Algerian deal this week, suggesting Cairo continues to suffer from the confusion over its import regulations.

CBOT March wheat finished six cents lower at $4.66-3/4 per bushel (figures US$ except where noted). The contract’s losses of nearly three per cent during the last two sessions were the sharpest since December and wiped out gains seen earlier this week.

European milling wheat slumped to a life-of-contract low of 156 euros (C$240).

“It seems like the ongoing problems stemming from the Egyptian tenders have created a bearish undertone in the market,” said Terry Reilly, analyst at Futures International.

“When you look at the fundamentals in general, there’s really not much of a bullish case in wheat at all. Now that Argentina is getting some rainfall that is pressuring beans and corn, it’s just adding to the bearish undertone,” Reilly said.

CBOT March corn settled down 2-3/4 cents at $3.65-3/4 per bushel and CBOT March soybeans ended seven cents lower to $8.67-1/2. Each contract fell more than one per cent during the week, for their worst weekly declines so far of 2016.

U.S. regulatory data released after the close of trading showed speculative investors, including hedge funds, trimmed their net short positions in corn and soybean futures during the week ended Feb. 2 as well as narrowly increased their net short stake in wheat.

Analysts polled by Reuters expected USDA in its monthly supply outlook to show larger U.S. grain supplies but slightly lower world stocks.

Rains overnight in western Argentina were seen as beneficial, but overall crop stress was limited to only 20 per cent of the country’s crops, the Commodity Weather Group said in a note to clients.

“A lack of severe heat has helped to limit reductions in yield potential ahead of the rain event,” the meteorologist said.

— Justin Madden and Michael Hirtzer report on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Naveen Thukral in Singapore and Nigel Hunt in London.