BEIJING: Chicago wheat and corn futures lost ground on Monday, as traders squared off positions ahead of a widely watched US planting intentions report due later this week.
The most-active wheat contract on Chicago Board of Trade (CBOT) dropped 2.45% to $10.65-3/4 a bushel and corn was down 1.23% at $7.44-3/4 a bushel. Soybeans fell 0.7% to $16.98-1/4 a bushel.
“Wheat (futures) move is not that big, in the context of the recent fluctuation of the contract,” said Wang Xiaoyang, senior analyst with Sinolink Futures.
“On one hand, the impact from the Ukraine-Russia conflict on the agricultural products markets is being gradually digested by the market. On the other hand, buyers might turn to India to source wheat as Ukraine-Russia grains supply crisis lingers,” Wang said.
Wheat jumped to an all-time high earlier this month on concerns over supplies from the Black Sea region after Russia invaded Ukraine.
But the market is eyeing other origins such as European Union and India to replace some of the lost supplies from the Black Sea region.
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Large speculators raised their net long position in CBOT corn futures in the week ended March 22, regulatory data released on Friday showed. Wheat prices should be supported until the war ends, said an Asia-based trader.
“No major change on the fundamentals side. Just funds squared off their positions after gaining profits,” said the trader, who declined to be named as he was not authorised to talk to the media.
The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and raised their net long position in soybeans.
Analysts were expecting the US Department of Agriculture (USDA) report to show that farmers plan to decrease their corn seeding by 1.5% compared with 2021. Soybean plantings were seen rising 1.8%.
The report is scheduled to be released at 1600 GMT on Thursday. Losses in soybeans were limited by signs of strong demand for US supplies even with newly harvested beans from South America available on the marketplace.
Asian shares stalled and oil prices slid, as coronavirus lockdown in Shanghai looked set to hit global activity, while throwing another wrench into supply chains that could add to inflationary pressures.
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