CHICAGO: US corn, soyabean and wheat futures fell sharply on Wednesday, with traders noting selling by investment funds as commodity contracts tumbled through key technical support points.
Wheat futures notched the biggest decline, with the most-active CBOT soft red winter wheat contract sagging 2.4% to its lowest in nearly a month. Wheat faced additional pressure prospects for big harvests in the United States and European Union.
Sharp declines in the crude oil market sparked a round of risk-off trading by speculators who had built up bullish bets in agricultural commodities in the past few months due to concerns about supply shortages.
“Energy is getting dumped on pretty hard today,” said Mark Schultz, chief market analyst at Northstar Commodity. “Everybody is nervous about what is going on. “We are in liquidation. If we don’t recover, we will have some margin calls.”
At 11:27 a.m. CDT (1627 GMT), Chicago Board of Trade May soft red winter wheat futures were down 16-3/4 cents at $6.81-1/4 a bushel, bottoming out at its lowest since April 21.
Crop scouts on the first day of the Wheat Quality Council’s annual tour of Kansas projected an average yield for hard red winter wheat in the northern part of the state at 59.2 bushels per acre, up from 46.9 bushels in 2019.
Grain trade association Coceral raised its forecast for soft wheat production in the European Union, citing excellent yield prospects in Balkan countries and Spain.
CBOT July corn was 13 cents lower at $6.45-1/4 a bushel, with the market shrugging of another purchase of 1.36 million tonnes of the yellow grain by China.
The US Agriculture Department’s announcement of the sale was the fifth day in a row it has reported a deal with China.
CBOT July soyabeans were down 34-1/2 cents at $15.39-3/4 a bushel.