Wheat Futures Sink to New Low on Lower-Than-Expected Exports

By Benjamin Parkin Features Dow Jones Newswires

Wheat futures approached a three-month low Monday, pressured by lackluster exports.

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December-dated futures for soft-red winter wheat at the Chicago Board of Trade fell 1.5% to $4.09 1/2 a bushel, the lowest close since Aug. 30 and a new low for the contract.

The U.S. Department of Agriculture said Friday exporters sold 200,500 metric tons of wheat for the week ended Nov. 16, below analyst expectations. The subsequent selling pressure continued into Monday.

A steady pace of Russian wheat exports and falling local prices further strained U.S. markets, said Richard Feltes of brokerage R.J. O'Brien.

The U.S. share of the global wheat market in recent years has eroded as higher production in countries such as Russia -- now the world's largest exporter -- allowed them to sell cheaper grain to important consumers. U.S. farmers planted less wheat in 2017 as a result, and analysts say exporters will struggle to keep up with their competitors.

Outside markets added to the pressure on wheat. Crude oil fell sharply on Monday, and the U.S. dollar weakened overnight before steadying during the trading session. Analysts say a weaker dollar is important in helping make U.S. wheat an attractive option for global buyers.

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Falling wheat futures weighed down the corn market too, as traders moved their money out of the grain sector. CBOT December corn futures fell 1% to $3.38 3/4 a bushel.

Soybean futures rose Monday, though prices closed within a recent trading range. CBOT January contracts rose 0.3% to $9.96 a bushel.

The most recent soybean export sales reported by the USDA also fell short of expectations.

Traders are looking to potential issues with South American crops as a means of limiting supply and boosting U.S. exports. Recent forecasts show rain this week in the western part of Argentina, though corn and soybeans in central areas remain at risk of dryness stress in early December.

"Unless South America runs into weather woes that hurt yields, soybeans sales and shipments during the rest of the marketing year are likely to fall short of USDA projections," Dave Marshall of brokerage First Choice Commodities said in a note to clients.

Write to Benjamin Parkin at benjamin.parkin@wsj.com

(END) Dow Jones Newswires

November 27, 2017 16:34 ET (21:34 GMT)