Reuters logo
Wheat, soy notch biggest drops in 2 weeks; corn weak
March 7, 2011 / 8:49 PM / in 7 years

Wheat, soy notch biggest drops in 2 weeks; corn weak

CHICAGO (Reuters) - U.S. grain futures tumbled on Monday as investors worried that surging oil prices may dent demand, while forecasts for rain in drought-hit areas of the southern Plains put additional pressure on wheat, which slid 3.8 percent.

Wheat and soybeans posted their biggest daily losses in percentage terms in about two weeks. It was the first drop in soybean prices in five trading sessions.

Speculators lightened their long positions in grains even as crude oil prices retreated from 2-1/2-year highs hit early in the day, traders said.

“The markets are very nervous,” said Greg Grow, director of agribusiness for Archer Financial Services in Chicago. “It does not take much. I think people are just very spooked right now because of the events in the Middle East and trying to discern what the implications are.”

The U.S. Agriculture Department reported wheat export inspections of 21.44 million bushels on Monday, near the low end of forecasts, which the trade viewed as evidence that export demand for U.S. supplies would slow after a surge in February.

“End-users are well covered and I think the story that China has plenty of wheat stockpiled had something to do with it,” said Paul Haugens said, vice president of Newedge USA.

Chicago Board of Trade May soft red winter wheat settled down 31-1/2 cents at $8.00-3/4 a bushel. May corn was down 10-1/2 cents at $7.17-1/2 a bushel and May soybeans were down 19 cents at $13.95 a bushel.

“The biggest thing was guys being afraid that higher energy costs were hurting the world economies,” said Roy Huckabay, executive vice president with the Linn Group, a Chicago brokerage.

Volumes in corn, soybeans and wheat were well below their 30-day averages, which could signal a rebound on Tuesday.

“With the light volume, typically, you could see a little bit of a turnaround,” said Jason Roose, analyst with U.S. Commodities in West Des Moines, Iowa. “Every time the market has been showing any kind of a break, the end users have been grabbing the supplies.”

Prices for corn and soybeans strengthened near the close but wheat ended near its daily low, a bearish sign.

China said over the weekend that it was holding 100 million tonnes of wheat stocks, around the same amount as its annual output, reiterating Beijing’s resolve to keep grain prices in check.

Unrest in the Middle East had boosted world demand for wheat during February but traders said the political upheaval, could start to weigh on the world economic recovery.

Troops loyal to Muammar Gaddafi launched counter-offensives against rebel-held towns on Sunday, increasing fears that Libya is heading for a civil war rather than the swift revolutions seen in Tunisia and Egypt.

Dry conditions have plagued the U.S. Plains since the hard red winter wheat crop, which much of the world was counting on to ease the tight supply situation, was planted last fall.

“Some beneficial precipitation is expected for wheat over northern Kansas, northeast Colorado and southwest Nebraska on Tuesday,” said Mike Palmerino, agricultural meteorologist with Telvent DTN.

Additional reporting by Julie Ingwersen; Editing by David Gregorio

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below