HAMBURG/SINGAPORE: Chicago wheat futures fell on Wednesday, giving up some of the previous session’s gains as forecasts for rain across US grain belts and lack of export demand for US supplies weighed on prices.
Corn eased as private forecasters raised their estimates for US production, while soybeans rose on bargain-buying and robust US exports.
Chicago Board of Trade December wheat fell 0.8 percent to $ 5.12 a bushel by 1035 GMT after gaining 1.6 percent on Tuesday. January soybeans rose 0.4 percent to $ 8.82-1/2 a bushel, while December corn fell 0.4 percent to $ 3.78-3/4 a bushel.
“Wheat is weaker today because of forecasts of welcome rain in the US grain belts and the poor export outlook for US wheat,” said Frank Rijkers, agrifood economist at ABN AMRO Bank. “Market attention is returning to fundamental factors following dealing dominated by technical factors earlier this week.”
“US wheat looks too expensive in export markets and is not even being offered in a lot of export tenders.”
Wheat rose in the previous session on technical buying.
There has been a spate of global wheat purchase tenders from buyers in the Middle East and Africa but US wheat is too expensive to win business in these markets.
Ethiopia purchased about 800,000 tonnes of milling wheat that could include grain from the Black Sea and Baltic Sea regions, European traders said. The African state could book more volume as part of a tender for up to 1 million tonnes, they added.
“Corn is being pushed down by the optimistic private forecasts of the US corn crop, with expectations of a larger harvest than expected and with the second-largest corn yields in US history now forecast by some,” Rijkers said.
Private analytics firm Informa Economics on Tuesday projected US 2015 corn output at 13.718 billion bushels, up from its Oct. 2 estimate of 13.561 billion bushel.
If realized, Informa’s corn yield estimate of 170.1 bushels per acre would be the second-highest in US history after last year’s record yield of 171.0.
On Monday, commodity brokerage INTL FCStone raised its forecast to 13.543 billion bushels, up slightly from the firm’s month-ago estimate of 13.541 billion bushels.
In addition, US corn exporters are facing stiff competition, with Brazilian corn exports setting a record high in October.
“Soybeans are gaining from some bargain buying together with some support from strong export demand for US soybeans, especially from China,” Rijkers said.