September 5, 2022
Four percent drop in US wheat futures on September 1 due to concerns of economic slowdown
US wheat futures fell more than 4%, and corn and soybeans slipped on September 1 on mounting concerns about a global economic slowdown, analysts said, just as the US Midwest crop harvest nears.
Wall Street stocks came under pressure as data showing that US manufacturing grew steadily in August rattled some investors who worry that a strong economy strengthens the case for the Federal Reserve to keep raising interest rates. US stocks staged a late rally to eke out modest gains, but crude oil futures CLc1 settled down about 3%.
Chicago Board of Trade December wheat WZ2 settled down 37-1/4 cents at US$7.94-1/4 a bushel. CBOT December corn CZ2 ended down 12-1/2 cents at US$6.58 a bushel and November soybeans SX2 fell 27-3/4 cents to close at US$13.94-3/4 a bushel.
Wheat posted the biggest declines on a percentage basis as the US dollar .DXY surged, making US grains less competitive globally.
Wheat exports from Russia, the top global supplier, are expected to rise to four million tonnes in September from 3.5 million tonnes in August as a bumper crop begins to reach the market, traders and industry analysts said.
Meanwhile, seasonal pressure weighed on corn and soybeans as both crops neared maturity in the US crop belt.
"It's the time of year when the grains tend to be bearish. In some of these markets, harvest has already started," said Craig Turner, a grain broker with commodity brokerage StoneX.
Fundamental news was relatively thin. The United States Department of Agriculture's (USDA) weekly export sales report, normally released on Thursdays, was delayed until at least September 15 due to problems with the launch of a new reporting system.
"Without any kind of major demand driver, the market will sell off along with everything else, stocks and energy," Turner said.
Traders shrugged off news of fresh US soy sales. The USDA confirmed private sales of 396,000 tonnes of soybeans to unknown destinations, the latest in a series of export deals over the last two weeks.
Following the CBOT close, StoneX lowered its estimate of the average US 2022 corn yield to 173.2 bushels per acre (bpa), from 176.0 a month ago. For soybeans, StoneX raised its US yield forecast to 51.8bpa, from 51.3 previously.