PARIS/CANBERRA: Chicago wheat futures fell on Friday in a technical setback following an export-fuelled rally, while soybeans also lost ground as the market assessed forecasts of rain next week in parched Brazilian crop belts.
Corn ticked down, like wheat, after being buoyed on Thursday by bigger-than-expected weekly US export figures.
March wheat, the most active wheat contract on the Chicago Board of Trade (CBOT), was down 1% at $5.92 a bushel by 1313 GMT.
It hit a two-week high at $5.99 on Thursday but faced chart resistance at the psychological $6 threshold, traders said.
The US Department of Agriculture (USDA) reported export sales of 2023/24 wheat in the week ended Nov. 23 at 22,800 metric tons, a six-week high. The USDA said China had bought a net 197,310 tons, also the most in six weeks.
Following recent contract lows in Chicago and weather disruption to Black Sea shipments, improved export prospects supported gains this week in a wheat market in which speculators have built a large short position.
But a plentiful supply of cheaper Russian grain and expanding traffic in a war-time shipping corridor from Ukraine remained a curb on wheat prices as southern hemisphere crops arrived on the market.
“As the reduced (Black Sea) exports will presumably be only temporary and should normalise again once the weather calms down … prices risk seeing a certain countermovement in the coming weeks,” Commerzbank said in a note.
The Buenos Aires Grains Exchange said Argentina’s 2023/24 wheat harvest could be larger than currently expected, as late frost may have done less damage than forecast.
CBOT January soybeans fell 0.9% to $13.31-1/4 a bushel, and March corn slipped 0.6% to $4.80 a bushel.
Consultancy Patria Agronegocios said Brazil would produce 150.67 million tons in the 2023/24 cycle, below last season’s 154.10 million, due to drought in key producer states.
The projection is the first seen by Reuters that predicts a year-on-year decline in soy production in Brazil, the world’s biggest soybean exporter.
However, showers and easing heat could help crops next week in much of Brazil.
Export demand has also underpinned the soy and corn market this week.
Weekly US corn export sales exceeded expectations, while the USDA on Thursday also reported sales of 134,000 metric tons for delivery to China.
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