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Wheat falls but set for first weekly gain in a month

U.S. wheat futures edged lower on Friday, retreating from a near two-week high touched in the
previous session, but the grain was poised to record its first weekly gain in a month following forecasts for lower global production.

Soybeans held steady as the oilseed was poised to record weekly gains of nearly 3%, while corn remained unchanged.

The most active wheat futures contract on the Chicago Board Of Trade were down 0.1% at $5.20-1/4 a bushel after rallying more than 3% on Thursday when prices hit a high of $5.23 a bushel – the highest since July 1.

As a result, wheat is on course to finish the week up 1%, the first weekly gain in a month.

Analysts said the U.S. Department of Agriculture’s (USDA’s) supply and demand forecast report were driving the weekly gains.

“The USDA published sharply lower production (and export estimates for Russia, the world’s largest exporter. The USDA also cut their estimates for the EU, Ukraine, Australia and
Canada,” said Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia.

“The new numbers mean a substantial shrinkage in export expectations in the global wheat market.”

The USDA lowered its forecast of 2019/20 global wheat ending stocks to 286.46 million tonnes, down from 294.34 million in June and near the low end of a range of analyst expectations.

The most active corn futures were steady at $4.48 a bushel after closing up 1.9% on Thursday.

Corn is up more than 1% for the week, the second straight weekly gain.

The USDA raised its production forecast for corn to 13.875 billion bushels, based on its larger-than-expected June 28 planted acreage estimate of 91.7 million acres.

The government left its estimate of the U.S. corn yield unchanged at 166.0 bushels per acre, while most analysts in a Reuters survey had expected a slight reduction.

The most active soybean futures were steady at $9.17 a bushel after closing up 0.9% on Thursday.

Soybeans are up more than 2.5% for the week, the biggest weekly gain in a month.

The USDA lowered its U.S. 2019-20 soybean production estimate to 3.845 billion bushels, down from 4.150 billion in June.

The USDA cut its soybean yield estimate to 48.5 bushels per acre, from 49.5 in June, a slightly below market estimates.

Grains prices at 0255 GMT
Contract Last Change Pct chg Two-day chg MA 30 RSI
CBOT wheat 520.75 -0.75 -0.14% +3.17% 522.88 60
CBOT corn 448.00 0.00 +0.00% +1.93% 441.43 64
CBOT soy 917.00 -0.25 -0.03% +0.47% 909.94 57
CBOT rice 11.90 -$0.03 -0.25% -0.21% $11.78 69
WTI crude 60.47 $0.27 +0.45% +0.07% $55.81 69
Currencies
Euro/dlr $1.126 $0.001 +0.10% +0.12%
USD/AUD 0.6983 0.001 +0.14% +0.37%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential
Source: Reuters (Reporting by Colin Packham; Editing by Rashmi Aich)

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