January 14, 2020 / 10:43 PM / a month ago

GRAINS-Wheat hits 6-month top as world prices rise; corn off, soy flat

 (Updates with closing U.S. prices)
    By Julie Ingwersen
    CHICAGO, Jan 14 (Reuters) - U.S. wheat futures hit a
six-month high on Tuesday, supported by a pickup in export
business and news that Russia, the world's top wheat supplier,
is considering limiting grain exports through June, traders
    Soybean futures ended flat and corn drifted lower as brokers
awaited Wednesday's signing of a U.S.-China Phase 1 trade deal
that could reopen China's giant market to U.S. grain and farm
product exports.
    Chicago Board of Trade March wheat settled up 6-1/4
cents at $5.68-1/2 per bushel after reaching $5.73, the
contract's highest level since June 28, and the highest for a
most-active wheat futures contract since August 2018.
    CBOT March corn ended down 1/2 cent at $3.89 a bushel
and March soybeans finished unchanged at $9.42-1/4.
    Wheat got a boost from news that Russia's agriculture
ministry may set a non-tariff quota for grain exports of 20
million tonnes in January-June.
    The agriculture ministry's draft, which has yet to be
reviewed by the government, sees the quota at 20 million tonnes
of grain, which Russia can export without damaging the domestic
market, the ministry said.
    "It's the Russian story, where they are talking about export
quotas," Tom Fritz, partner with EFG Group in Chicago, said of
Tuesday's strength in CBOT wheat futures. 
    Meanwhile, Egypt's main state wheat buyer purchased 240,000
tonnes of Russian and Romanian wheat in an international
purchasing tender. Prices including cost and freight (C&F)
ranged from $248.85 to $249.90 per tonne, up about $3 to $4 from
an Egyptian wheat tender on Jan. 8.   
    "It seems like there is a lot of wheat business around right
now. The Egyptians continue to pay up," Fritz said. "World wheat
prices are going up, so we have to follow suit."
    Corn and soybean futures languished ahead of Wednesday, when
U.S. and Chinese officials are expected to sign a Phase 1 trade
deal. The pact may allow the two sides to start resolving their
trade war which led to cuts in exports of U.S. soybeans, corn
and other farm products to China.
    Reports say China has agreed to vastly increase U.S. food
and farm product imports, but the text of the proposed agreement
has not been released, leaving markets uncertain.
    "Markets are drifting today until we see the actual signing
of the Phase 1 trade deal between the U.S. and China and
crucially the actual details of the deal, as we still know
almost nothing," said Matt Ammermann, commodity risk manager
with INTL FCStone.
    Even if China's market is reopened to American soybeans,
U.S. exporters face tough competition from a huge soybean
harvest in Brazil in early 2020 following recent good weather.

    CBOT settlement prices:
                                  Net     Pct  Volume
                         Last  change  change        
 CBOT wheat     WH0    568.50    6.25     1.1   64981
 CBOT corn      CH0    389.00   -0.50    -0.1  101032
 CBOT soybeans  SH0    942.25    0.00     0.0   76467
 CBOT soymeal   SMH0   302.00   -1.80    -0.6   59958
 CBOT soyoil    BOH0    34.07    0.12     0.4   65932
    NOTE: CBOT March wheat, corn and soybeans shown in cents per
bushel, March soymeal in dollars per short ton and soyoil in
cents per pound.

 (Reporting by Julie Ingwersen in Chicago
Additional reporting by Michael Hogan in Hamburg and Naveen
Thukral in Singapore
Editing by Richard Chang and Matthew Lewis)
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