By Jesse Newman
CHICAGO--Wheat futures sank to a nearly three-month low Thursday, buffeted by huge world harvests that are adding to an oversupply of the grain. Corn and soybeans also lowered.
Wheat prices for a seventh consecutive session as sellers piled into the market, driven in part by signs Australian farmers are harvesting a massive crop when world inventories of the grain already are record large. The prospect of a big Australian harvest exacerbates worry among grain traders who have long been concerned about the competitiveness of U.S. wheat on the world market, causing some fund managers to liquidate bullish bets on the grain, analysts said.
Among traders' concerns for wheat is the U.S. dollar, which is currently trading near 13-year highs against a basket of international currencies. A stronger greenback can stifle exports of domestic farm goods such as wheat because it makes them less affordable for overseas buyers.
Wheat futures for December dropped 9 cents, or 2.4%, to $3.71 1/2 a bushel at the Chicago Board of Trade, the lowest closing price since Sept. 6.
Losses in the wheat market weighed on corn prices, as speculation grew that cheap wheat will displace corn in animal feed rations world-wide, curbing demand.
Corn prices declined to a two-month low, though losses were capped by stronger prices for crude oil, which tend to buoy corn and soybean markets. Higher oil prices often encourage U.S. refiners to blend alternatives such as ethanol and biodiesel -- made from corn and soybeans, respectively -- into the U.S. fuel supply, ramping up demand for the crops.
CBOT December corn fell 5 cents, or 1.5%, to $3.31 3/4 a bushel, the lowest settlement price since Sept. 29.
CBOT January soybeans shed 2 1/2 cents, or 0.2%, to $10.29 3/4 a bushel.
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(END) Dow Jones Newswires
December 01, 2016 16:09 ET (21:09 GMT)
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