U.S. grains: Wheat firm on Russia export quota plan

Chicago corn ends lower

CBOT May 2020 wheat with Bollinger (20,2) bands. (Barchart)

Chicago | Reuters — U.S. wheat futures rose on Friday on optimism about export prospects as a Russian plan to cap grain exports for the rest of the season shifted attention back to potential supply tensions during the coronavirus pandemic.

However, futures pared gains on profit-taking ahead of the weekend and worries that the rally would make U.S. supplies less attractive.

Soybean futures ended modestly higher. But corn futures fell on prospects for further reductions in the production of corn-based ethanol, and expectations for a jump in U.S. corn plantings this spring compared to last year.

Chicago Board of Trade May wheat futures settled up 2-1/4 cents at $5.71-1/4 per bushel (all figures US$). May soybeans ended up 1-1/4 cents at $8.81-1/2 a bushel while May corn fell 2-3/4 cents to finish at $3.46 a bushel.

CBOT May wheat pared gains after surging to $5.87 a bushel, its highest in two months, on news that Russia’s agriculture ministry proposed a grain export quota of seven million tonnes for April-June, in a bid to protect domestic supply.

The figure was in line with market expectations for Russian shipments, but raised concern that it might be followed by other restrictions, traders said.

Agricultural markets have been nervously monitoring steps toward export limits on some crops to protect domestic markets, with top wheat exporter Russia a particular focus.

“If Russia has backed out of the marketplace, we could see some (U.S. export) business,” said Brian Hoops, president of Midwest Market Solutions. “But as we are pricing ourselves in the mid-$5 (per bushel) range … this is a place where demand usually backs off,” Hoops cautioned.

Wheat futures drew support earlier this week as panic buying of food staples during the coronavirus crisis fueled milling demand and spurred speculative buying. Traders have been trying to gauge how long the demand will last.

For the week, CBOT May wheat rose about six per cent, while May soybeans climbed about two per cent and May corn added 0.7 per cent.

Corn futures closed lower on Friday, retreating after a three-session rebound as traders squared positions ahead of the weekend and the U.S. Department of Agriculture’s U.S. planting intentions and quarterly stocks reports, due on Tuesday.

Analysts surveyed by Reuters on average expected the government to project U.S. corn seedings at 94.3 million acres, up from 89.7 million in 2019, and soybean plantings at 84.9 million acres, up from 76.1 million last year, when poor weather curbed acreage of both crops.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Colin Packham in Sydney.

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