Chicago Board of Trade wheat futures fell more than 1 percent on Thursday, setting back from a two-session rally as traders returned their focus to record-large global inventories and poor export demand for US supplies, traders said. Corn and soyabean futures also declined.
At the CBOT as of 1:01 pm CST (1901 GMT), March wheat was down 5-3/4 cents at $4.62-3/4 a bushel. March corn was down 1 cent at $3.66-1/4 a bushel and the March soyabean contract was down 2 cents at $8.80-1/2 per bushel. CBOT wheat posted the biggest decline on a percentage basis, retreating from Wednesday's 1-1/2-week high. "The last couple days we have seen what I think has been spec short covering. The impetus was stronger equity markets and energy markets. We don't have that today, so we sag," said Tom Fritz, partner with EFG Group in Chicago.
Underscoring ample world supplies, farm office FranceAgriMer raised its forecast for French soft wheat ending stocks for 2015-16 to 6.0 million tonnes, up from 5.8 million last month and the most in 17 years. In a sign of further headwinds for US wheat exports, consultancy Strategie Grains raised its forecast for European Union 2016-17 soft wheat exports to 30.6 million tonnes, up 1.7 million from its previous estimate. "Low-priced EU and Black Sea wheat continues to pressure US wheat and corn export prospects," said Dan Cekander, president of DC Analysis.
CBOT corn and soyabean futures drifted lower as mostly good weather in South America bolstered prospects for hefty corn and soyabean crops from Brazil and Argentina. "Across most of the major corn and soyabean areas in Argentina, soil moisture is now quite favourable for crop development," MDA Weather Services said in a daily note.
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