US wheat lower

US wheat futures ended lower on Thursday, unable to follow a short-covering reversal in corn and soyabeans ahead of a make-or-break European Union summit and on the eve of a US government crop report. Strong technical support and positioning ahead of Friday's USDA crop report helped corn lead soyabeans higher after an early slide tied to nagging concerns that the EU summit Friday will fail to find a solution to the EU debt crisis.
News of better-than-expected weekly export sales also supported corn prices, helping corn diverge from weaker equities and oil. Though few surprises are expected in the USDA supply and demand report Friday after a string of recent losses, players don't want to be well-positioned for the unexpected, said Jeffries analyst Shawn McCambridge. "USDA has surprised us in the past," he said. "It is enough to chase a few shorts out of the market."
Commodity funds bought an estimated 7,000 corn contracts Thursday, along with 3,000 soyabean contracts. Funds sold 2,000 wheat contracts, trade sources said. The fund selling in wheat pushed prices to the lowest point since in more than a week under additional pressure from abundant wheat crops seen in Australia and Canada, and stiff export competition that has seen US supplies bypassed in recent tenders.
Chicago Board of Trade March wheat futures ended down 3-1/2 cents at $5.97 after falling early as low as $5.90-3/4, the lowest point since November 28. March corn futures ended up 7-1/2 cents at $6.00-1/4 after sliding early to $5.85. And CBOT January soyabeans settled up 1-1/2 cents at $11.32-1/2.
Soyabeans were supported in part by ideas that Chinese demand for US soya could pick up in the face of forecasts for dry weather in South America. A forecasted dry spell was expected to stress South American corn and soyabean fields. Brazilian government crop supply agency Conab said Brazil will see its output of soyabeans tumble more than 5 percent in the 2011/12 harvest. Also supportive, US soyabean exports totalled 795,600 tonnes in the latest reporting week, above trade estimates for 550,000 to 650,000 tonnes, the USDA said on Thursday.
Soyabean futures were limited, like other commodities, by fears that a global economic slowdown triggered by the eurozone debt crisis could slash demand. Firmness in the US dollar has added pressure, making the US commodities less competitive on world markets.