Wheat futures at the Chicago Board of Trade fell on Monday in a profit-taking setback from last week's advances, led by long liquidation in the Minneapolis and Kansas City markets, traders said. Some floor talk of better than expected yields in the early US spring wheat harvest and in Europe added pressure.
"I think people were taking some profits. People saw very limited upside potential for the short term, so we saw some liquidation overnight, and it carried into today's session," Prudential Financial analyst Shawn McCambridge said.
CBOT September wheat ended down 6-3/4 cents at $4.00-1/2 per bushel, falling through support at its 50-day moving average of $4.03-1/2. Deferred months were down 4-1/2 to 8-1/2 cents. Prices settled near the day's lows after attempts to rebound the market at midday failed to attract much interest.
Funds sold 2,000 contracts, with Shatkin-Arbor Inc a noted late seller of 400 September, traders said. Volume was light, estimated by the CBOT at 35,391 futures and 4,790 options.
Forecasts called for another hot, dry week in the northern US Plains spring wheat belt. But drought worries that supported wheat prices in recent weeks were fading as the crop neared maturity and the early harvest expanded. "At this point, you're reaching the limit in terms of how much damage you can do as the crop matures at a rapid pace," Meteorlogix forecaster Mike Palmerino said.
Crop scouts on the Wheat Quality Council's US spring wheat tour will assess the crop this week, with a production estimate expected on Thursday. After the close, the USDA said the spring wheat crop in North Dakota, the top US spring wheat state, was 5 percent harvested as of Sunday, at least a week ahead of average.
The USDA said 34 percent of the US spring wheat crop was rated in good to excellent condition, unchanged from the previous week. Cash basis bids for soft red winter wheat in the Midwest were steady as the harvest wound down. The USDA late Monday said the US winter wheat crop was 86 percent cut, ahead of the five-year average of 81 percent.
Wheat futures also fell in Europe on Monday, retreating from last week's contract highs as market talk of better European yields prompted profit-taking. Weekly export inspections data was bullish. The USDA said 17.6 million bushels of US wheat were inspected for export last week, above a range of trade estimates for 12-16 million. Of the total, 1.7 million bushels were earmarked for China. In export news, Jordan tendered to buy 50,000 tonnes of wheat, while South Korea passed on a tender for 52,500 tonnes of feed wheat.
The CFTC's latest Commitments of Traders report showed large speculators expanded their net long position in CBOT wheat for the week ended July 18, leaving the market open to long liquidation. Funds cut their net longs in Kansas City and Minneapolis wheat but were still heavily weighted to the long side.