Wheat little changed
November 23, 2012
US wheat ended nearly flat on Wednesday as concerns about dry conditions underpinned the market, but corn and soyabeans slid in choppy trading the day before the US Thanksgiving holiday. Trading was light ahead of the break, leaving markets vulnerable to sudden changes.
“In a thin market like this you can push it down a few cents, and then get to some technical or psychological level and … two hours from now see it up a few cents,” said analyst Bill Nelson of Doane Advisory Services. Chicago Board of Trade December wheat rose 1/4 cent to $8.45-1/4 per bushel, shrugging off comments by Russia’s deputy agriculture minister that Russian grain exports could reach 15.5 million tonnes in the current crop season. Some back months weakened slightly. Dry weather and record-setting high temperatures are maintaining “severe stress” on hard red winter wheat from South Dakota to Texas, the US Department of Agriculture (USDA) said on Wednesday. “I’m surprised we’re not getting more publicity out of the poor wheat conditions,” said Jason Roose, vice-president at US Commodities.
The USDA said on Monday its rating of the winter wheat crop fell to 34 percent good-to-excellent, below analysts’ expectations, due to persistent dry conditions in the US Plains. Chicago December corn lost 0.3 percent, or 2-1/4 cents, at $7.41 a bushel, snapping a three-day winning streak on profit-taking and slowing demand for ethanol production. After recent disappointing weekly corn export data from the USDA, more poor results are expected Friday, as US corn remains too pricey to be competitive, Roose said.
“You have historically very high prices, and I think even the best merchandisers in the country are saying, ‘how long can we keep these strong premiums?'” Firm US cash markets and tight supplies underpinned corn prices, said Rabobank analyst Erin FitzPatrick. Chicago January soyabeans lost 0.3 percent, or 4-1/2 cents, to $14.08-1/4 a bushel, on technical selling. Traders were also digesting contradictory demand signals from China during the past week.
Private exporters reported the sale of 120,000 tonnes of US soyabeans to China for delivery during the 2012/13 marketing year, according to the USDA on Wednesday. China, the world’s top soya importer, is expected to step up purchases from the overseas market with the government halting the sale of state reserves. Just last week, however, China cancelled orders for 600,000 tonnes of US soyabeans, sending soyabean prices to a five-month low.