U.S. grains: Wheat drops as fears fade about Russian export limits

(Photo courtesy Canada Beef Inc.)

Chicago | Reuters — U.S. wheat futures fell two per cent on Tuesday as Russia denied it was discussing grain export restrictions, while soybean futures rose for the fifth consecutive session on strong export demand.

Corn futures advanced as traders adjusted positions ahead of a monthly U.S. Department of Agriculture report on Wednesday.

The wheat market bucked the firmer trend in corn and soy after Russia, one of the world’s largest wheat exporters, eased concerns about potential export restrictions that had supported prices. SovEcon, a private consulting firm, said Russia’s grain exports will remain at high levels in December, fueled by a weaker rouble.

“World wheat values are being pressured today from news that Russia is not considering limiting its grain exports,” said Brian Hoops, president of U.S. brokerage Midwest Market Solutions.

Chicago Board of Trade March wheat futures fell 12-1/4 cents to $5.85-3/4 a bushel and touched a two-day session low of $5.83-1/2 (all figures US$).

The French farm ministry added pressure on wheat prices by estimating soft winter wheat plantings for the 2015 harvest at 5.1 million hectares, up two per cent from a year earlier, traders said.

USDA, in its monthly report on global supply and demand, is expected to increase its outlook for U.S. wheat and corn stocks and to cut its forecast for soybean inventories.

Some corn traders bought back previously sold positions, pushing up prices, “in case it’s a friendlier report than a lot of people want to expect,” Hoops said.

Analysts expect U.S. 2014-15 corn ending stocks to increase to 2.027 billion bushels, from 2.008 billion in November, according to a Reuters survey.

CBOT March corn ended up five cents, or 1.3 per cent, at $3.95-1/4 a bushel. January soybeans rose 5-1/2 cents, or 0.5 per cent, to $10.49-1/4 a bushel and are up almost 14 per cent since the beginning of October due to strong export demand, particularly from top importer China.

“The market is shifting its psychology to one where it is recognizing that we have some really high usage, although still no shortage of supplies,” said Jefferies oilseeds analyst Anne Frick. “I think people might be scaling down their carry-over estimates, and the USDA is likely to do so as well.”

— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Julie Ingwersen in Chicago, Nigel Hunt in London and Colin Packham in Sydney.

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