By Julie Ingwersen
CHICAGO, Jan 31 (Reuters) – U.S. wheat futures fell more than 3% on Monday to their lowest in nearly two weeks on forecasts of welcome moisture in the U.S. Plains wheat belt and waning fears of imminent conflict between Russia and Ukraine, traders said.
Corn futures followed wheat down, retreating from early strength. But soybeans rose, reaching a seven-month high on expectations that drought-stressed South American harvests could shift demand to the United States.
As of 1:04 p.m. CST (1904 GMT), Chicago Board of Trade March wheat WH2 was down 26-1/2 cents at $7.59-3/4 per bushel, and March corn CH2 was down 9-3/4 cents at $6.26-1/4 a bushel.
Wheat backed down from a near two-month high set last week driven by political tension between Russia and Ukraine, both major global exporters of wheat and corn.
“The Russians have said they are not going to do anything before the end of the Olympics, so we’ve got pretty much the month of February to work something out,” said Jack Scoville with the Price Futures Group in Chicago.
Meanwhile, U.S. forecasts called for storms at mid-week that should bring beneficial snowfall to much of the Plains and Midwest wheat belts, and softening cash markets indicated slowing domestic wheat demand from flour mills. KCBT/SCA
Soybean futures shook off the weaker tone in grains and climbed to life-of-contract highs, fueled by worries about declining estimates of South American crops.
CBOT March soybeans SH2 were up 22 cents at $14.92 a bushel after reaching $14.96-3/4, a contract top and the highest on a continuous chart of the most-active soybean contract Sv1 since June 14.
Agribusiness consultancies AgRural and AgResource trimmed their forecasts for Brazil’s 2021/22 soybean crop due to bad weather, estimating the expected output below the 130 million-tonne threshold.
AgRural said it expected Brazil’s harvest to reach 128.5 million tonnes, down from 133.4 million previously, while AgResource pegged the crop at 125 million tonnes from 131 million previously.
“Farmers in Brazil look like being reluctant sellers in this uncertainty. This is again opening up the debate about soybean export demand being switched from South America to the United States at a time of pretty tight U.S. soybean supplies,” said Matt Ammermann, StoneX commodity risk manager.
Smaller South American soybean harvests are likely to push major soybean export business to the United States from June, Hamburg-based oilseeds analysts Oil World said last week.
Chicago crop prices push higher on South American crop worries, Ukraine tensionshttps://tmsnrt.rs/3AHu5LO
(Additional reporting by Michael Hogan in Hamburg and Gavin Maguire in Singapore; editing by Barbara Lewis)
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