Wheat Futures Sell Off as Traders Brace for Russian Supplies
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 firstname.lastname@example.org
(END) Dow Jones Newswires
August 22, 2017 15:12 ET (19:12 GMT)