Wheat, corn and soy slip after rally but all head for weekly gains

FE Team | Published: September 06, 2024 21:54:05

Chicago wheat, corn and soybean futures eased on Friday as traders decided that a fortnight-long rally which lifted prices from near four-year lows has left the contracts over-valued amid plentiful supply, reports Reuters.
All three crops were nevertheless on track for weekly gains.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 0.4 per cent at $5.72-1/2 a bushel by 0035 GMT but up 4.2 per cent for the week, its second straight weekly increase.
CBOT corn slipped 0.1 per cent to $4.10-1/4 a bushel but was up 2.2 per cent from last Friday's close, also its second weekly gain in a row, while soybeans fell 0.2 per cent to $10.21-1/2 a bushel but were up 2.1 per cent over the week for a third consecutive weekly rise.
The rallies were driven by speculator unwinding some of their hefty short positions. Nudging the markets towards higher prices were a weak dollar that stimulated U.S. export demand and poor wheat production in Western Europe.
That tide turned on Thursday, however, with commodity funds deciding that the contracts had become over-valued and turning net sellers of CBOT corn, wheat and soybeans, according to traders.
Cheap wheat continues to flow from the Black Sea region, pressuring prices, and the US will shortly begin harvesting what are - despite a dry end to the growing season - predicted to be huge corn and soy crops, creating a flood of new supply.
Many traders are waiting for the U.S. Department of Agriculture to release its September crop estimates next week before making big moves.
Brokers StoneX this week lowered their US corn production estimate to 15.127 billion bushels from 15.207 billion and raised its estimate for US soybean output to 4.575 billion bushels from 4.483 billion.