US wheat futures fell 1.6 percent on Friday, flirting with a 3-1/2 year low on expectations that supplies will remain abundant even though lower prices have boosted export demand, traders said. Corn fell, pressured down by forecasts for rain in South America but soybeans firmed, closing higher on a wave of technical selling.
Wheat led the declines, with market watchers saying that the United States has enough supplies to meet the needs from exporters at the US Gulf. "The wheat market has found a level where US exports are more competitive," Sterling Smith, futures specialist for Citigroup said in a note to clients. "However, the market will need to continue to deal with the outlook for record world stocks going forward."
Chicago Board of Trade March soft red winter wheat ended down 9-1/4 cents at $5.63-1/2 a bushel, settling near its weekly low. Wheat prices fell 1.1 percent this week, their seventh straight weekly loss. Egypt's main government wheat buyer GASC booked 60,000 tonnes of US soft red winter wheat as part of a 295,000 tonne purchase on earlier this week, providing a boost to the market on Thursday. But the strength was curbed by signs that suppliers, were also active in export markets.
"Two cargoes sold to Egypt is good news but it's only one opening for US wheat," a European trader said. US wheat faces stiff competition in Asian markets from India, which is trying to export more reserves before what the government expects to be a record-large harvest this year. State-run trading company MMTC Ltd has issued an international tender to sell and export 120,000 tonnes of Indian milling wheat, European traders said on Friday.
On Thursday, the European Union reported its third-largest weekly volume of wheat export licences so far this season to stay on course for a full-year record. CBOT March corn dropped 4 cents to $4.24 a bushel, notching a 1.9 percent loss this week. Corn's weekly loss was the biggest since falling 2.9 percent in the week ended November 1, 2013. "South American weather continues to be a weight on prices as the conditions continue to be quite favourable for crop development," Citigroup's Smith said.
The weather is critical for corn development as much of the crop in Argentina is in its yield-determining pollination phase. Showers are expected Monday through Friday in Argentina, with most of the crop belt receiving 1 to 3 inches (2.5 to 7.6 cm) of rain, said John Dee of Global Weather Monitoring. Commodity Weather Group, a rival forecasting service, estimated that three-quarters of the belt would see 0.5 to 2 inches of rain.
Strong demand for US corn helped limit the declines. Private exporters reported the sale of 204,000 tonnes of US corn to Egypt for delivery during the 2013/14 marketing year, the US Agriculture Department said on Friday. CBOT March soybeans were 1-1/2 cents higher at $13.16-1/2 a bushel. The contract rose 1 percent this week. Soybeans traded lower for much of the session but found technical support as the March contract neared its 30-day moving average.
Private analytics firm Informa Economics raised its outlook for 2014 US corn plantings to 93.319 million acres from 91.486 million. Informa also trimmed its estimate of soybean plantings to 81.264 million from 81.929 million. The futures market will be closed on Monday in observance of the Martin Luther King Jr. Day holiday.
Source:- brecorder.com
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