Chicago wheat dropped to a five-week low on Monday with improving weather in the drought-hit US Plains and prospects of plentiful global supplies dragging on prices. Corn slid to its lowest since March 11 due to expectations for good progress on planting across much of the US Midwest in the coming weeks.
Chicago Board of Trade July wheat was down 0.8 percent to $6.69 a bushel, after hitting a session low of $6.65-1/2 a bushel - the lowest since April 11. The contract fell 7 percent in the past week. July corn had lost 1 percent to $4.78-3/4 a bushel by 1113 GMT, just above the intra-day low of $4.77-3/4 a bushel - the lowest since March 11 and down more than 5 percent in a week.
The wheat market is facing pressure after the National Oceanic and Atmospheric Administration forecast rains for many key US growing regions and as concerns fade about the impact of the Ukraine crisis on the grains market, with importers continuing to buy wheat from Ukraine despite political turmoil. "Prices rose on a weather market, combined with the crisis in Ukraine. The crisis is now easing, there is less anxiety, and the problem of a smaller hard red winter wheat crop was already priced in," a European trader said.
Russian President Vladimir Putin has ordered military forces to return to their permanent bases after drills in three regions bordering Ukraine, the Kremlin said on Monday. Putin's office said he had issued the order because the spring manoeuvres were over. The move could also be intended to ease tension in Russia's stand-off with the West over Ukraine before Kiev holds a presidential election on Sunday.
Egypt, one of the world's largest importers of wheat, bought 60,000 tonnes of Ukrainian wheat for shipment from June 20-30, the main government wheat-buying entity said on Friday. The rapid progress being made with corn planting in the United States was also weighing on the price of the rival product wheat, Commerzbank said in a note, pointing out that US farmers had already been able to catch up the entire planting backlog the week before last.
Large speculators cut their net long position in CBOT corn futures in the week to May 13, regulatory data showed. The Commodity Futures Trading Commission's weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, raised their net long position in CBOT wheat and cut their net long position in soybeans. The US Agriculture Department said on Friday that private exporters reported the sale of 180,000 tonnes of soybeans for delivery in the 2014/15 marketing year to unknown destinations, which traders said was likely China.
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