Wheat, corn and soy slip after rally but all head for weekly gains
Chicago wheat, corn, and soybean futures eased as traders deemed recent price rallies overvalued. Wheat fell 0.4%, corn dropped 0.1%, and soybeans slipped 0.2%, though all posted weekly gains. Speculators covering short positions and a weak dollar initially boosted prices, but abundant global supply, particularly from the Black Sea region, pressured the market.
CANBERRA, Sept 6 (Reuters) – Chicago wheat, corn and soybean futures eased on Friday as traders decided that a fortnight-long rally which lifted prices from near four-year lows has left the contracts over-valued amid plentiful supply. All three crops were nevertheless on track for weekly gains.
FUNDAMENTALS * The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.4% at $5.72-1/2 a bushel by 0035 GMT but up 4.2% for the week, its second straight weekly increase. * CBOT corn slipped 0.1% to $4.10-1/4 a bushel but was up 2.2% from last Friday’s close, also its second weekly gain in a row, while soybeans fell 0.2% to $10.21-1/2 a bushel but were up 2.1% over the week for a third consecutive weekly rise.
* The rallies were driven by speculator unwinding some of their hefty short positions. Nudging the markets towards higher prices were a weak dollar that stimulated U.S. export demand and poor wheat production in Western Europe. * That tide turned on Thursday, however, with commodity funds deciding that the contracts had become over-valued and turning net sellers of CBOT corn, wheat and soybeans, according to traders. * Cheap wheat continues to flow from the Black Sea region, pressuring prices, and the U.S. will shortly begin harvesting what are – despite a dry end to the growing season – predicted to be huge corn and soy crops, creating a flood of new supply. * Many traders are waiting for the U.S. Department of Agriculture to release its September crop estimates next week before making big moves.
* Brokers StoneX this week lowered their U.S. corn production estimate to 15.127 billion bushels from 15.207 billion and raised its estimate for U.S. soybean output to 4.575 billion bushels from 4.483 billion. * Ukrainian farmers could increase the winter wheat sowing area for the 2025 harvest to more than 5 million hectares from 4.7 million hectares in 2024, an industry source said. MARKETS NEWS * MSCI’s global equities index edged down on Thursday as investors digested mixed economic data and anxiously waited for Friday’s crucial U.S. jobs report, while and oil prices held near 14-month lows as demand worries offset draws on inventories.
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