CHICAGO (Reuters) - U.S. wheat futures sagged on Thursday amid a wave of profit-taking after surging to a three-month high early in the session.
Wheat prices had rallied 20 percent during three straight days of gains this week on crop weather troubles in the United States and Europe, before the surge stalled after briefly breaking through the 100-day moving average.
Soybean futures also were lower, dragged down by lower crude oil prices, while tight old-crop supplies supported a small rise in the nearby corn contract.
“I think it is kind of a pause to catch our breath type day,” said Bill Gentry, a broker for Risk Management Commodities in Lafayette, Indiana. “Markets typically do not move in a straight line.”
Bullish fundamentals limited Thursday’s declines, with wheat prices supported by adverse weather that was expected to hamper global production this year.
“I think after this early week rally, a lot of the bullish news may already be in the market,” said Chad Henderson, grain market advisor with Prime Agricultural Consultants. “Bull markets need to be fed everyday. We need something else that is going to feed us right now.”
The choppy grain markets partly reflected a broad decline in both commodity and stock markets on Thursday amid weak data on housing and regional business conditions.
Chicago Board of Trade July wheat was down 3-3/4 cents at $8.13-1/4 at 11:42 a.m. CDT (1642 GMT), after rising in the opening minutes of trade as high as $8.34-1/2, the highest point since February 22.
CBOT July corn was up 1/2 cent at $7.50-1/4 a bushel after hitting a high of $7.60-1/4 early in the session. CBOT July soybeans were down 3-3/4 cents at $13.75-3/4.
Excessive wet weather and flooding in the eastern U.S. Midwest is delaying corn plantings, threatening production potential, while drought in Kansas, Oklahoma and Texas has withered away prospects for the new winter wheat crop.
The weather woes have driven strong gains over the last several sessions and another prolonged period of wet weather forecast for the U.S. Midwest, and news Thursday of spreading drought in the Southern Plains continued to underpin prices.
Several analysts said they thought U.S. government forecasts last week for the global wheat harvest were too optimistic in the light of bad weather hitting not only the United States but also Europe.
“Dryness is a concern in EU wheat and Russia. The U.S. weather isn’t good either,” said Joe Bedore, CBOT floor manager for trade house INTL-FC Stone.
While drought hits winter wheat, spring wheat planting is being plagued by overly wet conditions.
“We expect downgrades again from the USDA this season, as the excessive moisture surpluses in the Northern Plains of the U.S. and the prairies of Canada may limit spring plantings,” a report from Dutch bank Rabobank said.
The weather concerns were fueling gains in MGEX spring wheat futures, which rose above the $10 a bushel level for the first time since February 15.
MGEX July spring wheat was up 10-3/4 cents at $10.07 a bushel.
(Additional reporting by Carey Gillam in Kansas City and Sam Nelson in Chicago)
Reporting by Mark Weinraub; Editing by Lisa Shumaker