(Agriculture.com) – Chicago wheat futures slid for a fourth consecutive session on Thursday, hitting the lowest in more than two weeks as abundant supplies weighed on the market, with the latest data from Canada showing higher than expected production.
Chicago soybeans pared gains scored earlier in the week due to concerns over dryness in Argentina, as traders booked profits in late-year adjustments and corn edged lower.
The decline in wheat was unsurprising given slow U.S. exports, said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.
“The catalyst seems to have been a higher estimate of Canada’s wheat crop by the local official statistician,” he said. “The estimate was the best part of 10 percent higher than where analysts were pegging the number, so it was a big shock.” Canadian farmers harvested larger crops than expected this autumn, reaping record-large canola output and a surprisingly big wheat crop, a Statistics Canada report showed on Wednesday.
Canola production topped 21.3 million tonnes, 8 percent higher than Statscan’s September estimate. The all-wheat harvest at 30 million tonnes exceeded Statscan’s previous estimate by 10.5 percent. The Chicago Board of Trade most-active wheat contract was 0.1 percent higher at $4.25-1/2 a bushel after dropping earlier to $4.23-1/2 a bushel, the weakest since Nov. 21.
Soybeans fell 0.7 percent to $9.95-1/2 a bushel. It had hit a four-month high of $10.15 a bushel on Tuesday. Corn was 0.2 percent lower at $3.52 per bushel. Despite a recent rise in soybean prices, there was little upside potential for gains next year, Commerzbank said. “The supply of soybeans will keep pace with the growing demand in China thanks to a record crop in the U.S. and only
slightly lower crops in South America,” it said in its outlook
for 2018.
“The global soybean market is likely to show a small surplus in 2017/18, meaning that the stocks-to-use ratio will fall only marginally short of the previous year’s record level.”
Worries about dry weather in Argentina, one of the world’s top exporters of soybeans and corn and the No. 1 global supplier of soymeal livestock feed and soyoil, had propelled soybeans higher.
Production of corn-based ethanol hit record rates of 1.108 million barrels a day, according to the U.S. Energy Information Administration, underlining robust demand for corn. Commodity funds were net sellers of CBOT soybean, soymeal, wheat, corn and soyoil futures contracts on Wednesday, traders said.
