October 23, 2013
Chicago Board of Trade (CBOT) wheat futures retreated on profit-taking and technical selling on Monday after rising to the highest since early June on last week’s report of a low official crop estimate in Argentina. Commodity funds bought a net 6,000 contracts, or 30 million bushels of CBOT wheat, during Friday’s US trading session but sold 3,000 contracts, or 15 million bushels, on Monday, according to CBOT trade sources.
Chicago Board of Trade December wheat closed down 6 cents per bushel at $6.99-3/4, December corn was up 2-1/2 cents at $4.44 and November soyabeans were up 12 cents at $13.03-1/4.
“Wheat was overdone, it came up and kissed the 200-day (moving average) and backed off. No one is too enthralled about wheat going much above seven dollars with corn below five dollars,” said Sterling Smith, futures specialist for Citigroup. The CBOT December wheat contract rose to a session high of $7.11-1/4 in the overnight Globex trading session, just under the 200-day moving average of $7.13, and then began moving lower on profit-taking and liquidation. Corn turned firm in late dealings on spillover buying from gains in soyabeans and despite active harvesting of a likely record large US corn crop.
Soyabeans rose on good demand from China, the world’s largest buyer of soyabeans. “Corn and soyabeans are seeing harvest pressure. There may be a little slower harvest this week which is supporting beans, that and China’s buying,” Smith said. The US Department of Agriculture on Monday said 235,000 tonnes of US soyabeans were sold to an unknown destination and traders believe the sale was made to China.
“I think there is still this underlying fear that the Chinese business has been larger than expected the last three weeks,” said Dan Cekander, analyst for Newedge USA. Traders have been kept in the dark regarding export business through much of October due to the shutdown of the US government, including the USDA’s export sales reporting. Cekander said the fear of the unknown will probably be supportive up until October 31, “when you get the export sales numbers.”
A first official estimate of the 2013/14 Argentine wheat crop, late on Thursday at 8.8 million tonnes, surprised the market as it was well below other estimates and suggested the exporter may have even less supply than anticipated. This added to a picture of tightening global supply and held up the prospect of more demand in neighbouring Brazil being switched to the United States for supply. But traders said there were media reports that the official Argentine outlook was erroneous and would be corrected, encouraging some selling at the end of the overnight session for Chicago Board of Trade futures. Chicago wheat climbed 2.9 percent on Friday as the Argentine crop estimate boosted export sentiment. Courtesy Reuters
World Agriculture News,
Published in ZaraiMedia.com