Wheat Futures Sell Off as Traders Brace for Russian Supplies
August 22 2017 - 2:27PM
Dow Jones News
By Benjamin Parkin
Wheat futures fell to the lowest close this year, leading losses
in a mixed session for grain and soybean futures.
September wheat futures at the Chicago Board of Trade fell 1.8%
to $4.02 1/4 a bushel, the lowest close since late December. Prices
have fallen over 25% since peaking in early July.
Analysts said mounting prospects of a large Russian wheat
harvest was pressuring U.S. prices.
"Ideas are that the Russians will now dominate the world market
and will keep prices cheap to get the big crop moved," said Jack
Scoville, vice president of Price Futures Group in Chicago.
Weakness in the wheat market also helped drag corn prices lower.
CBOT September corn futures fell 0.9% to $3.46 a bushel.
September soybean contracts, meanwhile, climbed 0.1% to $9.33
3/4 a bushel. Analysts said technical buying supported that market,
while early estimates from Midwestern crop scouts showed lower pod
counts in Ohio and South Dakota than recent years.
Traders are closely watching the eastern and western legs of the
Farm Journal crop tours for insight into how U.S. corn and soybeans
are developing. Many have high expectations that scouts will
uncover issues in crop fields.
Results so far have been mixed. While soybean pod count per
square yard on Monday fell below last year, corn yield estimates
have in Ohio rose.
South Dakota corn yield estimates were down 1.2% from last year
and 5.2% from the three-year average. Some analysts were expecting
to see larger reductions amid drought-related crop stress in the
Dakotas. Chip Flory, editorial director of Pro Farmer on the
western leg of the tour, said scouts had missed the worst of the
affected areas, however, and yields elsewhere in the state were
likely lower.
"You get outside of our tour areas and guys are going to be
happy with half the yield of what they had in the previous year,"
Mr. Flory said.
Participants on the tours said at least one clear picture was
forming: Erratic growing conditions created sharp local
disparities.
"It's been far from a perfect growing season and that's showing
up in those samples," said Brian Grete, editor of Pro Farmer, after
crossing into Illinois from Indiana with the eastern leg of the
tour.
Meanwhile, crop ratings released by the U.S. Department of
Agriculture on Monday were largely in line with expectations,
leaving traders with little to process.
Write to Benjamin Parkin at benjamin.parkin@wsj.com
(END) Dow Jones Newswires
August 22, 2017 15:12 ET (19:12 GMT)
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