Wheat eases after rally, US planting delays offer support
SINGAPORE/PARIS: Chicago wheat futures slid on Thursday as the market took a breather after climbing to a three-week high in the last session when prices were underpinned by concerns over flood damage and planting delays in the US Plains amid recent adverse weather.
Soybeans rose for a second consecutive session on hopes for progress in US trade talks with China, while corn edged lower after closing largely unchanged in the previous session.
The most-active wheat contract on the Chicago Board of Trade was down 0.5 percent at $4.62-1/2 a bushel by 1152 GMT, having closed 1.8 percent up on Wednesday when prices touched their highest since Feb. 28 at $4.65 a bushel.
Soybeans added 0.1 percent to $9.06-3/4 a bushel, while corn rose 0.3 percent to $3.72-3/4 a bushel.
"There is some support for the wheat market as we are witnessing adverse weather in parts of the US grain belt," said Phin Ziebell, an agribusiness economist at National Australia Bank.
"Although I am not sure a sustained rally is possible based on limited weather concerns."
Record floods have devastated a wide swath of the Farm Belt across Iowa, Nebraska, South Dakota and several other states, with more flooding expected. Early estimates of lost crops and livestock are approaching $1 billion in Nebraska alone.
Heavy snows and the expected flooding in the US northern Plains spring wheat belt, particularly in top producer North Dakota, have raised the risk of delays in planting the 2019 crop. Seeding normally begins in April.
Prices were also supported by a fall in the dollar after the US Federal Reserve on Wednesday all but abandoned plans to raise rates this year - a signal its three-year campaign to normalise policy might be at an end.
On the technical front, CBOT May wheat could rise further to $4.70-1/4 a bushel, having broken a resistance at $4.63.
Brazil, one of the world's largest wheat importers, is expected to buy less of the cereal in the new season starting in August because of a favourable outlook for local production, broker and analyst INTL FCStone said on Wednesday.
Soybean prices firmed on technical buying and hopes for progress in US trade talks with China, the world's top importer of the oilseed.
However, US President Donald Trump warned on Wednesday that the United States may leave tariffs on Chinese goods for a "substantial period" to ensure that Beijing complies with any trade agreement.
Commodity funds were net buyers of CBOT wheat, soybeans and soymeal futures contracts on Wednesday and net sellers of corn and soyoil contracts.