Grains slip lower on export, demand worries
U.S. grain and soybean futures closed lower Wednesday as plentiful supplies and competitive grain markets abroad pushed prices down.
Wheat futures fell 2.6% in Chicago trading, the lowest level since July 2010, weighed down by dim prospects for U.S. exports to international buyers. Countries such as Egypt, Bangladesh and Saudi Arabia have been in the market for grain, but U.S. wheat has faced stiff competition from rival suppliers such as the Ukraine and India, analysts said.
"Despite the fact that we've worked ourselves down to some of the lowest levels we've seen in years, we're still getting very little business in the way of exports," said Mark Schultz, chief analyst with Northstar Commodity, a risk-management firm based in Minneapolis. "We're not the cheapest."
March-dated wheat contracts at the Chicago Board of Trade fell 14 1/2 cents to close Wednesday's muted trading session at $5.51 1/2 a bushel. Wheat contract prices have been sliding for months, and some analysts saw the departure of the latest Midwestern cold snap and prospect for further snow cover in the days ahead improving prospects for U.S. wheat.
Bleak prospects anticipated for wheat prices have lured some speculators in recent weeks to position for the market to decline, and prices could get a bump if those traders decide to exit their positions and collect profits, according to Tom Leffler, owner of Leffler Commodities, a brokerage firm based in Augusta, Kan.
Corn and soybean futures also lost ground as traders marked progress in what is anticipated to be a big harvest in Brazil and Argentina, chief rivals of the U.S. in row crops. Favorable weather in the Southern Hemisphere has improved odds for South American corn and soybeans, adding supply on top of a bumper crop in the U.S. harvested last fall.
CBOT Corn for March delivery fell 4 1/2 cents, or 1%, to $4.27 1/2 a bushel. March soybeans declined 16 1/4 cents, or 1.3%, to $12.69 1/4 a bushel.
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(END) Dow Jones Newswires
January 29, 2014 15:27 ET (20:27 GMT)
DJ U.S. Grain Futures Close Lower on Supply, Export Concerns --Update->copyright