Posted on November, 17, 2023 at 06:46 am
Chicago wheat futures fell on Friday and headed for their biggest weekly fall since September after lower-than-expected U.S. export sales underlined weak demand and competition from cheap Russian grain.
Soybeans and corn also dipped, but both were set for weekly gains despite a sharp decline for soybeans on Thursday after forecasts for rain in top exporter Brazil eased supply concerns.
FUNDAMENTALS:
* The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.1% at $5.53 a bushel by 0125 GMT and down 3.9% for the week.
* CBOT soybeans fell 0.3% to $13.56-1/2 a bushel but were still 0.6% higher this week. Corn slipped 0.4% to $4.73 a bushel but were 1.9% up from last Friday's close.
* The U.S. Department of Agriculture (USDA) reported export sales of U.S. 2023/24 wheat in the week to Nov. 9 at 176,300 metric tons, below trade expectations for 250,000-500,000 tons.
* Wheat prices moved towards September's three-year low of $5.40 as Russia, wrapping up a second consecutive huge harvest, continues to pump cheap grain into global markets.
* The International Grains Council meanwhile raised its forecast for 2023/24 global wheat production by 2 million metric tons to 787 million tons.
* Excessive rainfall during winter grain sowings in France and to a lesser extent Germany will reduce the European Union's total soft wheat area for next year's harvest, hurt yields and support prices, consultancy Strategie Grains said.
* However, analysts say the wheat market is likely to tighten in the coming months as attention shifts to relatively poor harvests in the southern hemisphere.
* Brokerage StoneX lowered its forecast for Brazil's 2023/24 wheat harvest to 9.28 million tons from 10.53 million and said the country would import more than it previously estimated.
* The Buenos Aires grains exchange cut its projection for Argentina's wheat crop to 14.7 million metric tons from 15.4 million tons due to adverse weather.
* In soybeans, the USDA reported weekly U.S. export sales last week of more than 3.9 million metric tons, the highest combined crop year sales since 2012, after a surge in Chinese buying.
* Given poor figures earlier in the year, the high figure only lifted the sales pace closer to the normal range.
* A recent rise in domestic and foreign demand for U.S. beans helped lift CBOT futures to $13.99 a bushel on Wednesday, the highest since Aug. 30.
* But prices plunged on Thursday on expectations of crop-boosting rain in major producers Brazil and Argentina.
* The Buenos Aires grains exchange said it now expects more land to be planted with soybeans and less to be planted with corn due to late rainfall.
* Commodity funds were net sellers of Chicago soybeans, soymeal, soyoil and wheat futures contracts on Thursday but net buyers of corn, traders said.
* In corn, the International Grains Council raised its forecast for 2023/24 global output by 4 million metric tons to 1.223 billion tons, lifting its estimate for the U.S. harvest to 387 million tons.
* Strategie Grains increased its estimate for the 2023 EU maize (corn) crop to 61.0 million metric tons from 60.6 million despite the rainfall hampering harvesting in France.
* Corn prices are hovering near three-year lows amid plentiful supply.
MARKETS NEWS
World stocks snapped a five-day rally on Thursday as investors took a breather, while oil prices slumped almost $4 per barrel to a four-month low on signals of higher U.S. supply and lackluster Chinese demand.
Source: Marketscreener