August 29, 2014 / 11:24 AM / 5 years ago

GRAINS-Rain forecast weighs on U.S. corn, soy, wheat futures

* Corn, soy near contract lows on weather view

* Wheat pressured on easing of Russia-Ukraine tensions

* Corn, soy, wheat post weekly losses (Updates with closing prices, adds new analyst quote)

By Mark Weinraub

CHICAGO, Aug 29 (Reuters) - U.S. corn and soybeans closed lower on Friday, flirting with contract lows on forecasts for rain that boosted confidence of bumper harvests for both crops this fall.

The weather outlook, which called for rains across broad stretches of U.S. growing areas, also weighed on wheat futures as farmers prepared for seeding of the winter crops.

“All these rains that we are supposed to be getting,” said Mark Gold, managing partner with Top Third Ag Marketing. “Not only is it going to help the crops that are out there, but it is going to certainly replenish the soils for the winter wheat.”

Traders also noted some profit-taking as investors closed out positions ahead of a long weekend. U.S. markets will be closed on Monday for Labor Day.

Chicago Board of Trade soybeans for November delivery, the most actively traded contract that tracks the crop that will be harvested in the coming weeks, ended 4-1/2 cents lower at $10.24-1/4 a bushel.

Although new-crop contracts were lower, the front-month September contract rose 15-3/4 cents to $10.89-1/2 a bushel due to tight cash market supplies.

CBOT December corn was off 4-1/2 cents at $3.64-3/4 a bushel. Prices bottomed out at $3.62-1/2, just above the contract low of $3.58 hit earlier this month.

“This weather is doing nothing but increase bushels out in the fields,” Charlie Sernatinger, analyst with ED&F Man Capital said in a note to clients.

CBOT December wheat was down 8-1/4 cents at $5.63-1/2 a bushel, facing additional pressure from what traders said appeared to be a lowering of tensions between Ukraine and Russia.

Russian President Vladimir Putin proposed that pro-Moscow rebels allow surrounded Ukrainian troops to retreat from rebellious eastern cities.

“We have seen some reasonable strength this week, but with a little decrease in tensions in Russia and Ukraine I think a lot of guys are coming back and saying, ‘You know, I just do not want to press the long side so I am liquidating my positions,’” said Bill Gentry, a broker at Risk Management Commodities. “The Russia-Ukraine situation is almost old hat.”

The prospect of plentiful global supplies acted as a drag on the market. The International Grains Council raised its forecast of 2014/15 world wheat production to 713 million tonnes, from 702 million previously, and boosted its outlook for corn by 4 million tonnes to 973 million.

CBOT corn futures were down 1.4 percent for the week but posted a monthly gain of 0.9 percent. Wheat shed 0.5 percent this week but was up 3.6 percent for August, its first positive month since April.

CBOT soybeans were 6.51 percent lower for the week and 11.0 percent lower for August, their fourth straight losing month.

In U.S. cents, benchmark contracts, except EU wheat (euros) and soymeal (dollars). CBOT wheat, corn and soybeans per bushel, rice per hundredweight, soymeal per ton and soyoil per lb. (Additional reporting by Naveen Thukral in Singapore and Nigel Hunt in London; Editing by Matthew Lewis and Paul Simao)

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