US wheat futures fell 3.4 percent on Friday, hitting their lowest level in more than two months, as prospects for ballooning stockpiles and bearish outside markets weighed on prices, traders said. Corn futures were down 2.5 percent, falling for the fifth straight day, on continued pressure from record US Agriculture Department production outlooks.
Corn futures last recorded five straight days of declines in early December 2009. A firm dollar and weak stock market prices was dimming prospects that investment funds would continue to pick up agricultural commodities as they rebalanced their portfolios.
"I think the trade in the short term here is returning back to the bias that we are going to go back into maybe trading some safe havens and get out of the risker assets of stocks and commodities," said Mike Zuzolo, president of Global Commodity Analytics & Consulting LLC. "I think corn and wheat in particular are getting caught up in that."
Corn futures extended this week's steep losses amid bearish expectations that US farmers will plant even more acres than last year when a record crop was harvested. The market shed 12.2 percent this week.
"The issue with corn is that winter wheat acres have cast a spotlight on how many corn acres can be planted this year and on some calculations that we have done, you could be looking at an extra 2 or 3 percent," said Scott Briggs, agricultural commodity strategist at ANZ in Melbourne. "We will see corn prices under pressure from the first quarter of this year as lower prices are needed to de-motivate plantings."
Chicago Board of Trade March wheat futures settled down 17-3/4 cents at $5.10 a bushel. Prices fell as low as $5.09 earlier in the session, their lowest level since November 10. Wheat prices dropped 10.3 percent during the week as the USDA's bearish US and global stocks report issued on Tuesday weighed on prices despite some buying by index funds as they rebalanced their portfolios. CBOT March corn was off 9-1/2 cents at $3.71-1/2 a bushel.
The market notched its worst weekly performance since December 2008, crashing through some technically supportive levels. "It is going to be quite choppy but I don't foresee a monster collapse in the grains," said Lars Steffensen, managing director of commodities fund Ebullio Capital Management. "Wheat at $4.60 to $4.70, corn at $3.20 to $3.50, I think that is your bottom and I think the upside potential is corn at $7 to $8 and wheat back up at $10."
Falling crude oil prices and a firm US dollar, which makes US commodities less attractive to investors looking for a hedge against inflation, pushed soybean futures lower despite good demand. Good growing weather for the maturing crop in South America also contributed to the decline in soy prices. CBOT March soybeans closed down 10 cents at $9.74 a bushel, a drop of 1 percent.
Soybean futures fell 3.8 percent during the week. China, the world's top buyer of soy, is likely to import about 4.5 million tonnes of soy in January after monthly imports hit a record in December at 4.78 million tonnes, according to an official report. Strong US crush data in December also indicated heavy usage. CBOT settlement prices.
Comments
Comments are closed.