Wheat holds near five-year lows on USDA forecast

In Commodity News 11/02/2016

U.S. wheat was steady on Wednesday, but holding near the lowest since 2010 hit in the previous session, as prices remained under pressure from the U.S. Department of Agriculture’s larger-than-expected forecast for end of season stocks.

FUNDAMENTALS

* Chicago Board Of Trade front-month wheat was unchanged at $4.57-1/2 a bushel after closing down 0.22 percent on Tuesday, when prices hit a low of $4.55 – the weakest since 2010.

* Front-month soybeans were also steady at $8.63-1/2 a bushel after closing little changed on Tuesday.

* Front-month corn rose 0.14 percent to $3.64-1/2 a bushel, having closed down 0.35 percent in the previous session when prices hit a low of $3.59-1/4 – the lowest since January 15.

* USDA pegged wheat ending stocks above trade expectations, largely due to a 4 million tonne cut in usage by China, reflecting that country’s policy shift that favors other grains.

* USDA raised its estimate for U.S. soybean ending stocks due to a slowdown in the pace of crushing at domestic processors.

* Crop prospects are improving for corn and soybeans in South America, which competes with the United States for export business, after weekend rains eased concerns about dryness in Argentina.

MARKET NEWS

* The dollar nursed losses around 3-1/2-month lows on Wednesday, pressured by the spectre of a global economic slowdown as European banks struggled to fend off growing doubts over their health and as oil prices slipped back.

* Oil prices slid for a fourth straight session on Tuesday and teetered close to 12-1/2-year lows hit last month, after weak demand forecasts from the U.S. government and the western world’s energy watchdog.

* U.S. stocks ended a volatile session slightly lower on Tuesday as a late-day rally led by materials and healthcare shares offset another big drop in oil prices.

DATA/EVENT AHEAD (GMT)

    0745   France   Industrial output  Dec 
    1500   Federal Reserve Chair Janet Yellen delivers semiannual monetary policy testimony before the House Financial Services Committee

Grains prices at 0135 GMT

  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI 
  CBOT wheat     457.50     0.00  +0.00%    -0.22%     471.66   29
  CBOT corn      361.50     0.50  +0.14%    -0.21%     362.97   32
  CBOT soy       863.50     0.25  +0.03%    +0.12%     872.08   36
  CBOT rice      $10.85    $0.09  +0.84%    -0.64%     $11.29   38
  WTI crude      $28.46    $0.52  +1.86%    -4.14%     $31.92   35
  Currencies                                                
  Euro/dlr       $1.130   $0.001  +0.10%    +0.96%
  USD/AUD         0.705   -0.002  -0.25%    -0.45%
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
 RSI 14, exponential
 Source: Reuters (Editing by Ed Davies)