US wheat futures edged lower on Thursday to stay near three-month lows, cooled by caution ahead of closely watched US government estimates and prevailing bearish sentiment in grain markets. US soybean and corn futures also extended losses, dampened by the prospect of substantial crops in South America and general worries about demand as violence in Libya continued to stoke oil prices.
In its monthly supply-and-demand estimates, the US Department of Agriculture was expected to raise projected US soy ending stocks but further cut the corn stockpile. "The key is ending stocks and if the report shows stocks lower than what analysts have estimated, it is likely to give a boost to prices of soybeans and corn." Chicago Board of Trade May wheat fell 0.63 percent to $7.53-1/4 a bushel by 1233 GMT, after rising in earlier trade.
In the wheat market, investors have been steadily trimming their positions this week as a surge in oil prices well past $105 a barrel, driven by fighting in Libya amid a revolt against leader Muammar Gaddafi, has raised concerns of a demand decline. US export sales to Iraq and Lebanon, plus news of a tender by Sudan, had failed to shake bearish sentiment, with traders underlining the risk of a slowdown in demand elsewhere.
In Europe, May milling wheat fell 1.72 percent to 228.00 euros a tonne to draw close to a low of 226.50 euros touched two weeks ago during a broad sell-off in grains as oil surged on the Libyan crisis. The absence of tenders from major importers such as Egypt, despite the sharp pullback, was pressuring wheat and any bearish reaction in corn after the USDA report could drag wheat much lower, European traders said.
CBOT May corn fell 1.39 percent to $6.91-1/4 to re-test a technical level already touched on Thursday. May soybeans slipped 0.87 percent to $13.37-1/4. Soy prices have been hit by expectations the USDA will lift US closing stocks forecast for the first time in 11 months, as well as sentiment that a favourable-looking harvest in South America would provide enough supply to satisfy export demand.
Comments
Comments are closed for this article.