Wheat futures reversed course to end lower Monday, unable to sustain a brief rally caused by a risk-friendly mood for global markets. A strong showing by centrist Emmanuel Macron in the French presidential election averted fears of a euroskeptic-only runoff. Corn and soybeans gained.
CBOT Wheat for May fell 0.7% to end at $4.02 a bushel, dropping back to the lowest level since Jan. 30.
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"It's a supply issue. We have an enormous wheat supply overhang from previously good crops and farmers can't stop producing it fast enough," said Dave Marshall, owner of brokerage First Choice Commodities in Nashville, Ill.
While usage of wheat is at a record level, production has expanded faster owing to fine weather and robust yields in wheat. Carryover stocks hit a new record of 252 million tons this year, equivalent to 73% of a year's usage of wheat, with nearly half of those stocks held in China.
While managed funds in five major ag markets sold 33,000 contracts last week, according to the U.S. Commodity Futures Trading Commission, for a new record short position of 404,000 contracts, soybean and corn prices have managed to find support on the charts where wheat hasn't.
"They're really aggressively pushing the short position before the crop in the U.S. is in the ground, and so that makes people a little bit nervous they're going too far too fast," said Mike McDougall, director of commodities agency at Societe Generale SA.
CBOT Corn for May rose 0.7% to end at $3.59 and May soybeans rose 0.9% to settle at $9.61 a bushel.
Helping to boost corn prices, wet weather is expected for the rest of the week across the U.S. corn belt, which could further delay the planting season. Traders were eagerly awaiting the U.S. Department of Agriculture's planting progress report, expected after the close, and gave estimates for corn planting of between 12% and 18% of the expected crop planted versus a five-year average near 30% for this time of year.
Soybeans were supported by reports of Chinese interest for imports, MaxYield Cooperative said in a note.
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(END) Dow Jones Newswires
April 24, 2017 14:56 ET (18:56 GMT)