(Reuters) – U.S. wheat fell more than one percent in early trade on Monday as traders locked in profits after strong gains in commodities late last week driven by hopes of stronger global demand after the Federal Reserve backed a new round of stimulus.
FUNDAMENTALS
Chicago Board Of Trade December wheat fell 1.03 percent to $9.14-3/4 a bushel, having hit a five-week high on Friday and closing up 2.47 percent.
November soybeans slipped 0.6 percent to $17.28-1/2 a bushel, having firmed 0.47 percent in the previous session.
December corn fell 0.9 percent to $7.75 a bushel after closing up 1.07 percent on Friday.
Risk assets were boosted after the Fed on Thursday said it was launching a third round of bond buying to pump $40 billion into the economy each month until the U.S. jobs market shows a sustained improvement.
The U.S. Department of Agriculture, in a closely watched supply-demand report on Wednesday, estimated this year’s U.S. soybean harvest at 2.634 billion bushels, down from last month’s estimate of 2.692 billion and below analysts’ average estimate of 2.657 billion.
Traders are keeping an eye on demand for soybeans, even as new supplies come in, amid concerns that more rationing of global demand may be needed due to poor crops in the United States and South America.
Egypt bought 235,000 tonnes of Russian, French and Ukrainian wheat on Thursday in its seventh international tender in a month and second for the week.
The world’s top wheat importer, Egypt has been making purchases amid concerns in the market that supplies are dwindling in the Black Sea region due to drought. Some traders suspect Russia may curb exports, although the government has said it will not.
MARKET NEWS
The dollar languished near a seven-month trough versus a basket of major currencies in Asia on Monday, but recovered some ground against a broadly weaker yen, which faces a central bank that could ease monetary policy this week.
Oil prices rose on Friday but settled below four-month highs hit in the session as concerns that high energy costs could threaten economic growth tempered hopes for stronger demand after the Federal Reserve launched its latest economic stimulus program.
U.S. stocks rose for a fourth straight session on Friday to close out the week at nearly five-year highs after the Federal Reserve took bold action to spur the economy, a move that could keep equities buoyed in the coming months.
