Profit-taking sinks wheat futures Monday
U.S. wheat futures fell Monday on profit-taking after recent gains and good prospects for U.S. wheat crops this year.
Chicago Board of Trade May wheat futures settled down 10 1/4 cents or 1.4% at $7.12 3/4 a bushel. KCBT May wheat fell 7 1/4 cents or 1.0% to $7.44 1/4 a bushel. MGEX May wheat fell 7 1/2 cents or 0.9% to $7.88 3/4 a bushel.
Speculative market participants sold wheat on expectations for prices to further ease after a recent rally stalled. CBOT May wheat fell slightly on Friday after rising for the previous six sessions straight.
Good prospects for U.S. and world wheat crops to be harvested in the coming year also weighed on wheat futures. Recent rain and snowfall have improved soil moisture levels for winter wheat crops in the Plains and Midwest.
Traders will watch for U.S. Department of Agriculture offices in Kansas, Texas and Oklahoma on Monday afternoon to issue their latest condition reports for local wheat crops.
Warmer temperatures have likely combined with the recent precipitation to improve crop conditions in those states, said Mark Schultz, chief analyst for Northstar Commodity, a Minneapolis brokerage. The proportion of the wheat crops in those states rated in "good" or "excellent" condition is likely to rise by two to five percentage points in the reports Monday, he said.
"If it's not improving now, then I can't imagine it's going to show much improvement" later, Mr. Schultz said.
Soybean futures fell Monday, pressured by concerns about easing demand. Traders expect U.S. soybean exports to slow as buyers turn to newly harvested South American supplies instead. Brazil soy harvests are already more than 50% complete, while Argentina harvests are just getting underway.
The USDA on Monday said officials inspected or weighed for export 8.927 million bushels of soybeans in the week through Thursday. That was well below traders' expectations for inspections of 17 million to 22 million bushels.
Traders are also concerned that demand from domestic processors is cooling. The National Oilseed Processors Association reported on Friday that February soy crushings dropped to 136.3 million bushels, below analyst estimates for 142.4 million, and well below the previous month's 158.2 million.
May soybean futures fell 16 1/2 cents or 1.2% to $14.09 1/2 a bushel.
Corn futures rose, boosted by hopes for improved demand. The USDA reported weekly corn inspections for export totaled 15.399 million bushels, higher than the expected range of 10 million to 15 million.
Corn also benefited from a sign of possible stronger demand from ethanol producers. Valero Energy Corp. (VLO) said Monday it resumed operations this month at an idled ethanol plant in Ohio, and it plans to restart a plant in Indiana in about a week. The company will then have all 10 of its ethanol plants online and operating "at or close to capacity," spokesman Bill Day said.
May corn futures rose 3 cents or 0.4% to $7.20 a bushel.
-Andrew Johnson Jr. contributed to this article.
Write to Owen Fletcher at firstname.lastname@example.org
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(END) Dow Jones Newswires
March 18, 2013 15:38 ET (19:38 GMT)
DJ UPDATE: U.S. Wheat Falls on Profit-Taking, Good Crop Prospects->copyright
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