Wheat finds footing after ample supply triggers fund selloff

CANBERRA: Chicago wheat futures regained some ground on Wednesday after plunging to eight-week lows in the previous session as ample supply and progress in peace negotiations between Russia and Ukraine triggered selling by speculative investors.

Corn futures steadied after falling on Tuesday as cheaper wheat provided competition for corn in feed markets.

A partial recovery in crude oil prices lifted soybeans after they slipped to seven-week lows on Tuesday due to plentiful supply and lacklustre demand for US exports.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.1% at $5.10 a bushel, as of 0553 GMT, after diving 2.2% and touching $5.07-1/2, its lowest since October 23, on Tuesday.

“The weather is too good in a lot of growing regions, and that is pushing up supply. Demand is not following to the same extent,” said Michael Whitehead, executive director for food, beverage and agribusiness insights at ANZ.

“Nothing appears to be on the horizon that would change the dynamic,” he said, adding that recent price drops have rarely reached $5 a bushel and this may be a level at which market participants sense a bargain and begin to buy.

Southern Hemisphere producers are pouring wheat into an already well-supplied market.

The Rosario Grains Exchange last week raised its production estimate for Argentina to a record-high 27.7 million metric tons and Australia is on track for its third-biggest harvest.

Commodity funds were net sellers of CBOT wheat, soybeans and corn on Tuesday, traders said. Their net sales of wheat were the biggest for any day since November 6, according to their estimates. CBOT corn rose 0.3% to $4.38 a bushel after falling to a three-week low on Tuesday.

Soybeans were up 0.3% at $10.65-3/4 a bushel, having slipped to their lowest since October 27 in the previous session.

Brent crude fell below $60 a barrel for the first time since May, putting downward pressure on prices of biofuels and the feedstocks used to make them, including soy.

O/R A peace deal between Russia and Ukraine would lessen risks to exports of commodities, including wheat, corn and oil, through the Black Sea.