Chicago wheat futures were on track for their biggest weekly decline since early September on Friday, as stiff competition from the Black Sea region and higher output in China weighed on the market.
Soybeans were headed a third straight weekly loss, while corn was down for a second week on U.S. harvest pressure and disappointing exports.
“Wheat has come under a bit of pressure this week on forecasts of higher supplies from Russia and IGC has raised its outlook for the Chinese crop,” said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney.
“But the latest drop (in wheat prices) is unwarranted as supplies are likely to tighten next year. Overall production in Russia and Australia is lower and global demand for wheat remains strong.”
The Chicago Board of Trade most-active wheat contract has lost 4.5 percent this week, the biggest decline since the week ended Sept. 7. The market was up 0.9 percent at $4.91-3/4 a bushel by 0242 GMT on Friday.
Expectations of higher wheat exports from Russia, the world’s biggest supplier, are adding pressure on U.S. wheat prices.
An improved crop outlook in China led the International Grains Council on Thursday to raise its forecast for world wheat production in the 2018/19 season.
The IGC put global wheat production at 728.8 million tonnes, up from a previous forecast of 716.7 million tonnes, although still well below the prior season’s 767.1 million tonnes.
A stronger dollar, which makes the greenback-priced commodities expensive for buyers holding other currencies, weighed on wheat futures.
Still, some Asian flour mills are looking to lock in wheat supplies until well into the middle of 2019, potentially shaking off a years-long trend for hand-to-mouth buying as global output is set to drop for the first time in six years.
Pressure from harvest of bumper soybean and corn crops in the United States kept a lid on prices.
Soybeans have declined 1.5 percent this week, while corn has lost 1.2 percent. Soybeans rose 0.2 percent to $8.43-3/4 a bushel and corn added 0.4 percent to $3.62-1/2 a bushel on Friday.
The CBOT soybean futures sank on Thursday after the U.S. Department of Agriculture in its weekly report showed 212,700 tonnes of export sales, well below trade expectations for a third week in a row.
Weekly U.S. corn export sales were similarly disappointing, at 377,500 tonnes (old and new crop years combined).
Commodity funds were net sellers of CBOT corn, wheat, soybean, soymeal and soyoil futures contracts on Thursday, traders said. Estimates of net fund selling in corn ranged from 17,000 to 35,000 contracts.
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Source: Brecorder
