US grains slumped early on Thursday, with wheat futures heading for their seventh straight session of declines on investor long liquidation tied to favourable weather for crops and cheaper supplies on offer in Europe and the Black Sea region. Wheat futures have fallen sharply from the more than 10-month high they notched early this month amid a deep drought in the southern US Plains hard red winter wheat belt. But crop-friendly rains fell over the weekend, while a weekly weather report early on Thursday showed drought conditions moderating.
Chicago Board of Trade wheat futures for July delivery eased 7-1/4 cents to $6.31-1/2 per bushel, the lowest in about three months. Wheat on a continuous chart was on track to shed about 11.5 percent this month for the worst such performance since September 2011. Corn futures for July delivery were down 4-1/2 cents at $4.68 per bushel as of 11:46 am CDT (1646 GMT). Corn was hovering just above the near three-month low notched in the previous session.
Showers were lingering in the Midwestern crop belt, while further precipitation forecast next week should benefit recently planted corn seeds, the Commodity Weather Group said in a note. The weekly US Drought Monitor showed a slight expansion of abnormally dry areas in the Midwest even as the most severe drought conditions eased in the Plains. "The reality is hitting the market," said Don Roose, analyst at US Commodities in West Des Moines, Iowa. "Funds have been big longs throughout the spring and they're sitting with a sizable position in a more favourable weather environment."
US regulatory data last week showed that speculative investors, a category that includes hedge funds, reduced their long bullish bets in corn for a third straight week and switched to a net short, or bearish, position on wheat futures. The better conditions in the United States come as countries such as Ukraine have undercut US shippers in international markets. CBOT July soybean futures edged 1-3/4 cents higher to $14.99-1/2 per bushel, boosted by snug supplies and strong bids by domestic processing plants.