Wheat drops to one-month low, soya weak, corn firm ahead of USDA report

CHICAGO: US wheat futures fell 1.7% to a one-month low on Wednesday, pressured by a favorable weather forecast for US crops and expectations for bumper Southern Hemisphere harvests, traders said.

Soybean futures also were lower while corn edged higher for the sixth time in seven sessions as traders staked out positions ahead of the US Agriculture Department’s monthly World Agricultural Supply and Demand Estimates report.

“The focus will be on whether USDA chooses to adjust the demand side of the ledger,” StoneX chief commodities economist Arlan Suderman said in a note to clients. “We could see the agency boost corn ethanol use, while both corn and soybean exports are vulnerable to reductions.”

The report will be released at 11 a.m. CST (1700 GMT). Analysts were expecting the government to raise its outlook for ending stocks of US soybeans and wheat and lower its forecast for corn supplies.

At 9:47 a.m. CST, Chicago Board of Trade March soft red winter wheat futures were down 13-3/4 cents at $7.80-3/4 a bushel. Wheat has been pressured by liquidation in the past week after funds built large long positions in a rally last month that sent Chicago futures to a nine-year high and Euronext futures to a record peak.

“Omicron’s emergence was more a catalyst for some investors to exit several markets simultaneously, wheat included,” said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

Market participants have also taken forecasts for mild temperatures and rainfall in some US winter wheat zones as a cue to sell wheat, traders said.