Wheat leads grains into a tailspin
U.S. wheat futures fell Monday amid a broad sell-off in commodities, with further pressure from expectations for world wheat supplies to be ample this year.
Chicago Board of Trade May wheat futures settled down 21 cents, or 2.9%, at $6.93 3/4 a bushel, a nearly two-week closing low.
KCBT May wheat fell 20 1/2 cents, or 2.7%, to $7.32 1/2 a bushel. MGEX May wheat fell 9 3/4 cents, or 1.2%, to $7.98 a bushel.
Wheat fell along with other commodities in a sell-off after disappointing economic data from China. Besides grain and oilseed markets, crude oil and metals markets also fell. Gold plunged for a second straight day.
- Also: Livestock futures slide on commodity pressure
- Follow Monday's trade with the 'Big Picture'
- Marketing Talk: China GDP
- Talk: No corn in 'Down South?'
- Also: Farmers report on poor planting conditions
Gross domestic product in China in the first quarter grew 7.7% compared with a year earlier. Growth was slower than in the fourth quarter and below economists' expectations of 8%, sparking worries that China could slow its commodity imports.
Further pressure for wheat came from uncertainty about whether supplies this year will be tight enough to justify higher prices.
Wheat crops in many major exporting countries are expected to be large this year, and some traders say the current U.S. crop could recover more than expected from dry conditions. CBOT May wheat on Friday reached a two-week closing high, boosted by concerns about freeze damage to Plains wheat crops that have already struggled with severe drought.
"Traders are going to be cautious because we've seen wheat crops recover in the past quite nicely," said Shawn McCambridge, senior grains analyst with Jefferies Bache in Chicago. Also, on a worldwide basis, "we're not really running out of wheat at this point," Mr. McCambridge said.
Some of the selling on Monday was likely done by speculative funds exiting bets on higher wheat prices, after prices on Monday failed to build on Friday's gains, he said.
Managed funds, including hedge funds, as a whole cut their bearish bets on CBOT wheat futures and options in the week through last Tuesday, regulatory data showed Friday. Money managers had a net short position of 22,094 contracts, down 37% from the prior week, due to an increase in bullish bets as well as a decline in bearish bets.
Export inspections data for wheat was below expectations on Monday, weighing further on futures. The USDA said officials had inspected or weighed for export 23.5 million bushels of wheat in the week through Thursday. Traders had expected inspections of 24 million to 28 million bushels.
Corn and soybean futures also fell in the commodity sell-off. Soybeans drew further pressure from data that showed lower-than-expected processing of soybeans in the U.S. in March.
Export inspections in the USDA report were also significantly lower than expected for soybeans, at 4.8 million bushels in the week through Thursday. Traders had expected 12 million to 17 million bushels.
May soybean futures fell 18 cents, or 1.3%, to $13.95 a bushel.
Corn was pressured by hopes wet weather this week will benefit dry soils in the Midwest, while a drier forecast for next week is expected to allow farmers to make more progress on planting.
May corn fell 11 3/4 cents, or 1.8%, to $6.46 3/4 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
April 15, 2013 15:08 ET (19:08 GMT)
DJ UPDATE: U.S. Wheat Hits Two-Week Closing Low Amid Commodity Sell-Off->copyright
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