WASHINGTON: US wheat eased off a four-week high amid disappointing export sales and forecasts for more rain relief in dry US growing belts, which offset concerns about adverse harvest weather in Australia and turned traders’ attention back toward large global supplies. The firmer dollar also made US wheat less attractive to those holding other currencies, as the greenback hit a three-month high against a basket of currencies.
Corn and soyabeans ticked lower too, as pressure mounted among traders who anticipate increased government estimates for the ongoing US harvest, to come out next week. Chicago Board of Trade December corn closed down 1.6 percent at $3.74-1/2 on Thursday, while January soyabeans fell 2.1 percent to $8.64 a bushel.
Meanwhile, CBOT wheat closed down 0.1 percent at $5.26-1/4 a bushel, after adding nearly 2 percent in the previous session when technical buying pushed prices up to $5.30-3/4 a bushel, the contract’s highest since October 7. But the news was more somber for wheat. USDA reported export sales of US 2015/16 wheat in the week ended October 29 at 84,600 tonnes, below a range of trade estimates for 300,000 to 500,000 tonnes and the lowest weekly total since September 24.
Still, the higher wheat prices in recent weeks has some analysts baffled, with Chicago wheat trading at nearly a $1.50 per bushel premium over corn, said Joe Lardy, research manager at CHS Hedging. “There is no fundamental reason we should be seeing a rally,” Lardy said, who thinks funds have been covering some of their very large short positions in wheat. “It’s the money flow that’s moving this market and fuelling this technical fire,” Lardy said.
Net US soyabean export sales also dropped last week to the lowest point in three months, according to USDA data. Traders say they are concerned Chinese soyabean imports are slowing going into the end of the year following several months of record-high imports, mostly from South America.
The question now, they say, is whether China’s appetite for soyabeans is sated from October orders, or whether demand may return soon. Total current marketing-year US wheat export sales are 17 percent behind the same point last year, USDA data showed, while soyabean export sales are 22 percent behind a year ago and corn sales are behind by 32 percent.
