Chicago | Reuters — Chicago Board of Trade wheat futures fell to a three-month low on Friday on signs that U.S. wheat is overpriced in a well-supplied global market, especially given strength in the U.S. dollar.
Soybeans rose on worries about dry weather in parts of the Midwest and spillover support from a strong rally in crude oil. Corn closed narrowly mixed in choppy trade.
At the CBOT, December wheat settled down six cents at $4.83-3/4 per bushel after dipping to $4.82-3/4, a contract low (all figures US$).
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Front-month September wheat touched $4.76, the lowest spot price since June 1, while the spot contracts in K.C. hard red winter and MGEX spring wheat fell to five-year lows.
Egypt’s state grain buyer booked 55,000 tonnes of Ukrainian wheat in an international tender at around $177 per tonne free-on-board (FOB), one day after buying Russian wheat for roughly $180 a tonne FOB.
No U.S. wheat was offered at either tender because prices were seen as uncompetitive.
“As long as they keep cutting world prices on wheat, it’s not going to help,” said Jim Gerlach, president of A/C Trading in Fowler, Indiana.
A stronger dollar made U.S. wheat even less attractive. The greenback rose to one-week highs, buoyed by calmer financial markets and generally positive U.S. economic data that supported the notion that the world’s largest economy was on a stable growth path.
CBOT soybeans firmed on concerns about dryness in the eastern Midwest as crops continue to develop.
“Dry, warm weather over the next couple of weeks may erode U.S. bean yields,” Helen Pound, a vice president with Wedbush Futures, wrote in a note to clients.
November soybeans settled up 6-1/2 cents at $8.85-1/2 a bushel.
Soybeans drew support from soyoil futures, which climbed more than three per cent as crude oil surged for a second straight session. Soyoil follows trends in crude due its role as a feedstock for biodiesel fuel.
CBOT corn closed mixed in choppy trade amid a lack of fresh news, following a volatile week on Wall Street. December corn ended flat at $3.75 a bushel.
“A lot of people are still focused on equities and just getting through the end of this week, which wore a lot of people out,” said Terry Reilly, an analyst with Futures International.
— Julie Ingwersen is a Reuters correspondent covering grain markets from Chicago. Additional reporting for Reuters by Nigel Hunt in London and Colin Packham in Sydney.
