Profit-taking pushed US corn and wheat futures lower on Thursday, but declines in wheat were limited by the first sale of US supplies to Iran in about three years and by prospects for more exports as Western sanctions have forced Tehran to scramble for food supplies.
Iran bought 120,000 tonnes of US hard red winter wheat - the type traded at the smaller Kansas City Board of Trade - the US government said before the market opened. The sale caught traders by surprise because it came at a time of increased tension between the two countries.
"It certainly opens the potential for more (wheat sales to Iran), especially if they are on a mission here, either because of crop reasons or wanting to store up food security reserves," said grains analyst Rich Feltes of RJ O'Brien. Soyabean prices bucked the overall downward trend, closing higher and matching the more-than five-month high hit earlier this week. Concerns that damage to South American crops will increase world demand for US soyabeans supported prices.
"Beans continue to be the strong link in the grains room," said Chad Henderson, grain market advisor with Prime Agricultural Consultants. CBOT May soft red winter wheat settled 4 cents lower at $6.64 a bushel while CBOT May corn dropped 4 cents to $6.54 a bushel.
"The grains are taking at least a temporary breather after the persistent rally into the end of the month," Matt Zeller, analyst for INTL FCStone, said in a note to clients. Traders were unable to confirm which grain company sold the wheat to Iran, whose nuclear ambitions are at the heart of the sanctions against the country. Traders suspected major grain companies like Cargill Inc, Bunge Ltd, Archer Daniels Midland Co and Louis Dreyfus did the deal but the companies did not respond to inquiries by Reuters seeking comments.
Wheat futures, which also faced pressure from a higher dollar, fluctuated between positive and negative territory several times during Thursday's session. CBOT May soyabeans ended up 2-1/2 cents at $13.22-1/2 a bushel, their ninth straight day of gains.