Wheat heads for biggest 3-week loss in 2 years on high supply

December 20th, 2013

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Category: Grains, Oilseeds

(Reuters) – U.S. wheat fell for a seventh consecutive session on Friday, putting the market on course to post its biggest three-week loss in two years, as plentiful global supplies continued to weigh on the market.

Soybeans edged lower, giving up last session’s gains, on concerns over slowing U.S. exports and prospects of bumper production in South America early next year.

Global wheat supplies are projected to rise in 2013/14, largely due to a record crop in Canada and higher Australian output.

In addition, Argentina’s agriculture ministry raised its outlook for the 2013/14 wheat crop by 500,000 tonnes to 9 million tonnes.

“The big issue with the wheat market right now is that you have big supply coming out of the U.S. and Canada,” said one Melbourne-based analyst. “Wheat is really struggling to find any friends at the moment.”

Chicago Board Of Trade March wheat eased 0.1 percent to $6.10 a bushel by 0334 GMT. March wheat has lost 8.8 percent in three weeks, the biggest decline since November, 2011.

The U.S. Agriculture Department said on Thursday morning that 2013/14 export sales of wheat were 656,100 tonnes in the latest reporting week, topping forecasts for 300,000 to 400,000 tonnes.

The soybean market faced headwinds from slowing U.S. exports.

January soybeans fell 0.1 percent to $13.25-1/2 a bushel, after modest gains in the last session, while March corn dropped 0.2 percent to $4.29-3/4 a bushel.

U.S. soybean export sales of 415,500 tonnes fell below the low end of analysts’ estimates for 700,000 to 900,000 tonnes, the USDA said. Soymeal export sales were a marketing year low of 77,100 tonnes, below expectations for 150,000 to 300,000 tonnes.

The outlook for a bumper South American soybean harvest early next year and expectations that China will shift its buying away from the United States also pressured beans.

Chicago corn futures could suffer with China rejecting more U.S. corn cargoes.

China has rejected a total of 545,000 tonnes of corn from the United States as of Dec 19, after detecting an unapproved genetically modified strain (GMO), the government’s quarantine authority said on Friday.

Export sales of corn for the 2013/14 marketing year were 827,100 tonnes in the latest reporting week, topping forecasts for 550,000 to 750,000 tonnes.

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