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Evening markets: wheat maintains losing streak

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Wheat took to a sixth day an unenviable run of posting day highs, lows and closes all below those of the previous session as the dollar continued to draw strength from fears for Dubai and Greece.

The greenback hit $1.4670 at one point against the euro, which has been weakened by Fitch's downgrade to Greek sovereign debt. Greece, along with the likes of France, Germany and Italy, is in the eurozone.

If a robust dollar was one punch to US commodities, making them less competitive on export markets, weak oil was another for crops, many of which are used in making biofuels.

Crude was 2.6% lower at 19:30 GMT, after data showed a surprise rise in US inventories of products such as heating oil and diesel.

Key data ahead

That was hardly an auspicious background for Chicago trading.

Wheat had the extra issue of every analyst pointing out that, with its supplies so rich and Rabobank saying they are only going to get richer in 2010, it does not deserve current prices.

"In order to clean up some of the excess inventory in the US, wheat prices need to get to 110% the value of corn," Allendale said.

"That is about $1.00 a bushel cheaper than current trade."

Still, at least the prospect of fresh monthly estimates from Washington on global crop supply and demand trimmed investors' appetite for anything major.

December wheat closed down 4.25 cents at $5.15 ½ a bushel, a fresh month-low, while the March contract ended off 4.5 cents at $5.35 ½ a bushel.

'Biggest snowstorm since 1996'

This time even corn joined it on the losers' board, despite the prospect of poor weather delaying the US harvest even further.

"Grain movement in the Midwest is at a standstill," Iowa-based broker US Commodities said.

"The biggest general snowstorm since 1996 is causing disruptions."

Funds didn't help, being sellers of 5,000 corn contracts with an hour of trading to go, Vic Lespinasse, GrainAnalyst.com's marketwatcher, reported.

"This has prompted their numerous local followers to trade from the sell side also, putting additional pressure on the market," he added.

Corn eased 0.5 cents to $3.68 for December delivery and 1.5 cents to $3.83 ½ a bushel for March.

China lead

Whether traders were still playing a long corn/ short soybean play, which they were operating earlier in the week, was unclear.

Still, it would have worked on Wednesday, with soybeans' losses well outstripping corn's.

The January contract closed down 1.5% at $10.27 a bushel, with March ending 1.4% lower at $10.37 ¾ a bushel.

The going always looked like being tough for Chicago soybeans after a 1.9% drop in prices on China's Dalian exchange overnight.

The Dalian is viewed as giving a good indication of thinking in China, the world's biggest importer of US soybeans.

French sowings

European grains drifted despite help from weaker currencies – notably sterling – which remains under the weather despite some temporary relief at the lack of a back windfall tax in chancellor Alistair Darling's pre-budget statement.

French data showing a rise in wheat plantings did not help much, with many commentators forecasting a drop in European sowings overall.

Paris wheat for January ended E1.00 lower at E127.75 a tonne, with London wheat for the same month off £0.45 at £105.05 a tonne.

Even rapeseed succumbed this time, after being buoyed in the last session by expectations of a fall-off in Ukrainian exports.

Paris's February contract ended downE1.25 at E281.00 a tonne.

By Agrimoney.com

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