2010-06-18 10:32

TOKYO - Wheat declined on speculation that a rally to a one-month high and a stronger dollar may erode demand for the US supplies. Soybeans also dropped after touching a one- week high.

Wheat futures on the Chicago Board of Trade lost 0.5 percent after Wednesday touching the highest level for the most-active contract since May 13 as wet weather disrupted field work in the US Midwest and Great Plains. Soybeans fell 0.5 percent after climbing to the highest level since June 8.

"It's just a technical correction against recent gains," said Takaki Shigemoto, an analyst at research and investment company JSC Corp. Wheat for September delivery fell as much as 2.25 cents to $4.7425 a bushel, and traded at $4.7475 at 2:15 pm Singapore time. Before Thursday, futures had gained 11 percent in the past five days.

The grain rose 2 percent on Wednesday, supported by Canadian wet-weather concerns, harvest delays in parts of the United States and news that Saudi Arabia is in the market for nearly 1 million tons of high-protein wheat, Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a daily note on Thursday.

The rain may also delay soybean planting that the US government said was 91 percent complete on June 13. Winter-wheat harvesting was 9 percent finished, less than the five-year average of 12 percent for this time of year, the data show.

Wet weather

The Canadian Wheat Board has said that as many as 12.5 million acres (5 million hectares) normally planted with spring crops would be unseeded because of wet weather. Wheat planting in Western Canada, the biggest growing area, will be 19.15 million acres, the lowest since 1971, the board said.

Soybeans for November delivery dropped 3.75 cents to $9.205 a bushel in Chicago after reaching $9.2825 earlier, the highest level for a most-active contract since June 8.

Canola for November delivery fell 1.2 percent to C$422 ($411) a ton on the ICE Futures Canada exchange Thursday after touching C$427.70, the highest level since August 31. The contract Wednesday gained for the eighth straight day, the longest winning streak since Jan 6.

The euro fell as much as 0.4 percent, weakening for a second day versus the dollar.

Corn for December delivery in Chicago was little changed at $3.7775 a bushel, after touching $3.815 on Wednesday, the highest level since May 12.

China, the world's second-largest corn consumer, may buy more than 1 million metric tons in the next 18 months.

Bloomberg News